Naples, Fla. — The economic outlook for the U.S. plastics industry remains mostly positive, although labor issues are looming on the horizon.
That was the projection of Perc Pineda, chief economist with the Plastics Industry Association. Pineda spoke at the 2018 Plastics News Executive Forum, March 6-7 in Naples, Fla.
The U.S. economy should post long-term average GDP growth of 2-3 percent annually, according to Pineda, including a rate of 2.7-3 percent in 2018, according to Pineda.
"The [U.S.] economy is operating at full capacity," he said. "We're not likely to see a recession this year or even next year. Prices might move up a bit, but we shouldn't see a dramatic shift in inflation anytime soon."
But Pineda added that "the next headwind" for the economy is likely to be the tightening of the labor market.
"Unemployment continues to decrease, so we'll see upward pressure on wages because there aren't that many people looking for work," he explained. "So, companies will have to compete for talent."
Pineda added that demographics affect the supply of labor.
"There aren't enough new entrants into the labor market," he said.
American firms are also struggling to find ways to improve productivity, although Pineda said that challenge "isn't strictly a U.S. phenomenon."
The U.S. plastics industry has maintained a trade surplus — thanks to exports of resin — and has continued to grow in recent years. Pineda pointed out that retail sales affect plastic shipments because "plastics are everywhere" and that sales of plastics into the electrical and appliance and food and beverage sectors have been healthy.
The U.S. housing market, where plastics are used in pipe and other applications, continues to recover, he added. Plastics sales into automotive uses are expected to be on the low side this year, Pineda said, with U.S. vehicle sales of just under 17 million.
Pineda added that even with current success, it's important for the market to look ahead.
"For plastics, it's all going to be about innovation, innovation and innovation," he said.