Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Videos
    • Podcasts
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Notable Leaders in Sustainability
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics Caps + Closures: A Global Online Event
    • Women Breaking the Mold Networking Forum
    • Bioplastics Live
    • Numbers that Matter Live
    • PFAS Live
    • Plastics in Politics Live
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Resin Prices Overview
    • Commodity Thermoplastics
    • High Temperature Thermoplastics
    • Engineering Thermoplastics
    • Recycled Plastics
    • Thermosets
    • Europe - Virgin
    • Europe - Recycled
    • Europe - Feedstock
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
News
September 16, 2015 02:00 AM

Film and sheet extruders building momentum

Bill Wood
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    After a shaky start to the year, activity levels for extruders of film and sheet improved substantially in the second quarter of 2015. This strong recovery demonstrates that this sector can do well at times when the overall economy is expanding at only a moderate rate of growth. And there is evidence to indicate that demand for plastic film and sheet will accelerate as soon as the U.S. economy start to gain speed in the coming months.

    This outlook is based on the trend that emerged in the latest Plastics News Business Monitor Index for film and sheet extruders. The index registered a strong 125.5 in the second quarter. This represents a robust increase from the value of 101.2 that was posted in the first quarter. A value above 100 indicates that overall business levels increased when compared with the previous quarter. Keep in mind that a reading of 125.5 does not mean that total business activity jumped by 25.5 percent, but it does indicate that the upward momentum in this sector accelerated significantly during the second quarter.

    The film and sheet segment was one of the strongest performers in our second quarter survey. At 125.5, the index for film and sheet was considerably higher than the 112.2 index value for the entire plastics industry. In other words, this sector accelerated faster than all of the other sectors in the plastics industry last spring. It must be noted that the film and sheet sector was one of the weakest performers in the first quarter of this year. So the strong performance this quarter may partly be due to some catching up, or what economist like to call “regression to the mean.” But a closer look at the data reveals that this segment should continue to be a reliable performer for the foreseeable future.

    As the numbers on the table show, all of the sub-indices that we calculate as part of our film and sheet index posted strong gains from their first quarter levels. The most crucial of these was in the new orders category. That sub-index was an outstanding 159.6. This means that 70 percent of our large pool of respondents reported an increase in new orders.

    When the new orders level is this strong it drives increases in all of the other categories. Production levels ramped up substantially, and there were still enough new orders to create a large (and therefore rare) increase in backlogs. This surge in new business also resulted in an escalation in the number of employees for the quarter.

    Other gains

    So those were the most noticeable gains that emerged from the data, but there are a couple of other numbers that caught my eye.

    The first is the small gain reported in the sub-index for export orders. A large number of our respondents probably do not have any export sales; therefore this sector of the industry was relatively insulated from the effects of the sharp rise in the value of the dollar earlier this year. Nevertheless, there were a few more respondents who reported of an increase in export sales than a decrease. A trend of steady-to-higher export orders during a time of a strong dollar is a sign of solid market demand.

    The other number that caught my eye was the reported overall gain in prices received. This is rare in the plastics industry at this time because of the recent trend of falling resin prices. Most processors from other sectors of the plastics industry reported the prices they received in the second quarter were lower, but that they still maintained healthy margins due to the decline in resin prices. For the film and sheet sector however, there is a strong indication that the prices they are getting are steady-to-higher. This is another indicator of strengthening market demand.

    We include a question about profitability in our survey, and 60 percent of the film and sheet producers who responded expect to be even more profitable in the coming months than they were in the second quarter. This is the highest proportion of optimists in the whole plastics industry.

    Not surprisingly, the sharp increase in business levels and profit is clearly evident in the sub-indices for both future expectations and capital spending plans. And here again, these values were the strongest in the industry when compared with the sub-indices from the other industry segments.

    This sector tends to perform well when there is strong growth in consumer spending. For the past six years, this recovery has been characterized by consistent, but still disappointing annual growth of only about 2 percent in consumer spending. This pace has been sufficient to generate less than-spectacular demand for plastic film and sheet products. But in recent months there is evidence to suggest that the rate of consumer spending is starting to rise.

    Crucial consumer sector indicators such as housing starts and auto sales are at post-recession highs and rising. The recent trends in both of these end-markets provide clear evidence that consumers are starting to increase their spending activity. Real disposable personal incomes, bolstered by a combination of rising employment levels and lower energy costs, are headed towards their highest growth rate since 2006.

    Historically, the film and sheet sector has thrived in these conditions. I do not expect the future index values to come in quite as high as it did in the second quarter. But my forecast does call for film and sheet demand to rise steadily and gradually through the end of 2016.

    RECOMMENDED FOR YOU
    Auto suppliers plan for uncertainty amid UAW strike, shift to EVs
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    An 8,000-ton dream for Milacron, 20/20 Custom Molded Plastics
    2
    Proposed tax on single-use virgin plastic resurfaces in Congress
    3
    Is the market getting serious about using recycled plastics?
    4
    Feedstock costs continue pushing up PET bottle resin prices
    5
    Reduced supply, rising oil costs lead to boost in recycled PET resin prices
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Find more newsletters at plasticsnews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Notable Leaders in Sustainability
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Videos
      • Podcasts
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics Caps + Closures: A Global Online Event
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
      • Editorial Livestreams
        • Bioplastics Live
        • Numbers that Matter Live
        • PFAS Live
        • Plastics in Politics Live
        • PN Live: Mergers and Acquisitions
        • Polymer Points Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Resin Prices Overview
      • Commodity Thermoplastics
      • High Temperature Thermoplastics
      • Engineering Thermoplastics
      • Recycled Plastics
      • Thermosets
      • Europe - Virgin
      • Europe - Recycled
      • Europe - Feedstock
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified