The pace of growth in total U.S. retail sales continues to accelerate gradually, and this trend bodes well for the medium-term demand for many types of plastics consumer goods and packaging.
After hitting a cyclical low of 1.3 percent growth at the very end of 2015, the rate of expansion in retail sales climbed to 2.9 percent in 2016, according to data from the Census Bureau. Through the first four months of this year, the pace of growth in total sales has accelerated to a rate of 3.5 percent.
My forecast for this year calls for a gradual acceleration in the trend to continue. For this year as a whole, total U.S. retail sales will expand 4.5 percent. This pace is just a little above the long-term average of 4 percent in this data, and this pace of expansion should correspond with a 3 percent increase in the total U.S. output of plastics products this year.
One feature of the Census Bureau's data on retail sales that makes it particularly useful for plastics industry managers and analysts is that it is broken down into a number of categories. This breakdown provides interesting insight into trends and changes in consumer spending patterns.
For a few of these categories, the bulk of their receipts are not a major factor in the demand for plastics products or packaging materials (for example, gasoline stations). But many of them are, so I have picked out a few that represent large end-markets of interest to plastics processors.
The category that has consistently grown the fastest in recent years has been nonstore retailers. This category includes online establishments such as Amazon. This category has been growing by double-digit rates for several years, and it now accounts for 11 percent of all retail sales in terms of dollar volume. I expect this category to remain a growth leader for the foreseeable future.