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January 12, 2017 01:00 AM

Report: US plastics industry seeing growth in employment, plant expansions

Steve Toloken
Assistant Managing Editor
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    Plastics Industry Association

    A new report from the Plastics Industry Association offers a generally positive economic outlook for the industry, noting that employment is growing after some steep declines, and that shale gas-related investments should help plastics fare better than other manufacturing sectors.

    The association's 2016 Size & Impact Report, released Jan. 11, said that employment rose 1.4 percent to 954,000 in 2015, the last year for which figures are available, and it said that U.S. demand for plastics hit a record $295.4 billion that year.

    “On the heels of the arrival of a new Congress and, soon, a new administration, the Size & Impact Report shows why the plastics industry will be such an important part of the effort to support job growth in manufacturing,” said Bill Carteaux, president and CEO of the Washington-based association.

    The report said plastics industry shipments overall were $418.4 billion in 2015, and it kept its place as the third-largest manufacturing sector, behind oil and gas extraction and automobiles.

    It said those $418.4 billion in shipments were down 2 percent from 2014, measured by dollar value, but it noted the volumes of shipments were up. Value went down because the price of plastic dropped on lower oil and gas prices but Carteaux said that's not a significant issue because volumes continued to grow.

    “Things have been on the increase the last few years,” Carteaux said in a webinar releasing the report, which the group prepares annually. “There's lots of reasons for optimism in manufacturing right now.”

    Carteaux noted positive reports on manufacturing in general from the Federal Reserve banks in New York and Philadelphia, and said a key purchasing managers index for manufacturing hit a 21-month record in December.

    The association's presentation included an analysis from the American Chemistry Council tracking plastics processor investment, noting 560 investments in expansion or new construction, with the most coming in Ohio, Michigan, Indiana, Wisconsin and Texas.

    Plastics Industry Association

    The report said Texas employed the most people in the plastics industry, ahead of California and Ohio, while Indiana remained the state with the highest concentration of plastics industry workers among non-agricultural employees.

    The report gave three reasons why the plastics sector is doing better than manufacturing overall: it's a relatively young industry with polymers continuing to replace other materials; productivity growth is faster than manufacturing overall, although just barely; and the development of shale gas feedstocks in the United States.

    It suggested that shale gas would be very important: “The likelihood that the continued, responsible and sustainable development of these resources will help keep plastics companies ahead of their peers in other manufacturing sectors is very high.”

    The report recommended policy makers focus on tax reform and workforce development, in addition to shale gas.

    Association officials also noted employment remains way down from the peak in 1999, when more than 1.3 million people worked in the plastics sector.

    Plastics industry employment hit a low point of 870,000 immediately after the 2008 recession but it has been climbing since, Carteaux said.

    Long term, the report said the plastics industry has fared better than other manufacturing industries.

    From 1980 to 2015, employment in plastics grew an average of 0.3 percent a year while manufacturing overall fell 1.2 percent a year.

    In the same period, plastics saw growth in real shipments and real value added of more than 2 percent a year, compared with less than 1 percent for manufacturing overall.

    Carteaux said the industry plans to emphasize that longer-term picture and its current growth prospects with policy makers, including incoming Trump Administration officials.

    “Plastics has kept employment growing on an average basis much more strongly than manufacturing as a whole, making it an ideal match for helping fulfill the President-elect and the new Congress's job growth priorities,” he said. “We will make sure they understand how large and important we are.”

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