Chicago — Apparent U.S. consumption of plastics goods grew in 2017, even as the industry's trade surplus declined by nearly $2 billion.
The increase in consumption — a measure of overall demand that includes domestic shipments, minus exports, plus imports — was 6 percent, according to the annual Global Trends report, released Oct. 31 at the 2018 Global Plastics Summit in Chicago.
The report, which analyzes trade data from 2017, "paints a complex and ultimately positive portrait" of the U.S. plastics industry, according to the Washington-based Plastics Industry Association.
The 2018 report "again shows that the U.S. plastics industry continues to innovate its way into new applications and new markets where even more consumers can benefit from these versatile, lightweight materials and products," said President and CEO Bill Carteaux.
The U.S. plastics industry's $2.9 billion surplus for 2017 was down from the $4.8 billion surplus posted in 2016. The 2015 surplus had been $7.1 billion.
Officials said the 2017 decline was the result of a 9 percent increase in plastics-related imports, which they described as "another sign of strong demand" in the United States.
As in previous years, the resin sector accounted for the entirety of the U.S. plastics industry's trade surplus. Resin had a surplus of $17.4 billion in 2017; plastics products had a deficit of $10.9 billion; mold making had a deficit of $1.5 billion, and machinery had a deficit of $2 billion.
Plastics Industry Association Chief Economist Perc Pineda said the shrinking trade surplus "shows how in-demand the products and services of plastics are in the United States."
"Our estimates show that in 2017 the plastics industry global trade volume increased 9.5 percent from 2016," he said in the release. "Free and fair trade is enormously beneficial to the U.S. plastics industry, and thus enormously beneficial to the nearly 1 million workers it employs."
Pineda said U.S. plastics employment is stable.
"Employment in plastics is projected to remain stable, with increases largely a function of labor supply. While U.S. manufacturing is more automated today than in previous years, [a] higher degree of automation can be expected in the years to come as artificial intelligence and enhanced connectivity become more common," Pineda said.
Pineda acknowledged that, looking ahead, the U.S. trade war with China may have an impact on U.S. resin exports.
"If you look at U.S. exports of polymers of ethylene to China last year, it was about $854.5 million — that's 5 percent of China's total imports. China imposing higher import duties on U.S. PE would increase the cost and potentially reduce U.S, share in the Chinese market," Pineda said.
For the first time, this year's report includes a ranking of every nation's plastics industry. Association officials described the ranking as "a tool that Plastics [Industry Association] members can use to identify new markets and areas where U.S. plastics companies can meet the unique demands of both developed and developing countries."
The global ranking was based on trade volume and placed the United States in the No. 2 position at $122.2 billion, trailing China at $146.5 billion. Germany placed third at $115.9 billion.
There was a wide gap between Germany and Belgium, which came in fourth at $49.5 billion. France rounded out the top five at $47.4 billion.
Officials said that despite the uncertainty of the renegotiation of the North American Free Trade Agreement, Mexico and Canada remained the U.S. plastics industry's strongest trading partners in 2017. U.S. plastics companies exported $15.7 billion to Mexico and $12.5 billion to Canada for the year.
Pineda said new rules of origin for motor vehicles, in the proposed United States-Mexico-Canada Agreement, could be a positive for the plastics industry.
"With Mexico and Canada as our largest plastics export market, the higher North American content requirement for autos could increase plastics industry exports," Pineda said.
On the subject of tariffs, they added that if trade tensions remain unresolved, the U.S. plastics industry's exports "would be negatively affected both directly and indirectly."
