Kickstart: Trying to forecast future business in unpredictable times

It's that time of the year when people are looking back for a "year in review" or looking forward to what the new year may bring. (As if the last few years haven't made it clear that the unexpected can — and will — happen.)

The American Chemistry Council covered both the look back and forward this week as it reported that the chemicals industry saw one of its "best years in a decade" in 2022, while also warning that conditions won't be as strong next year, PN's Frank Esposito writes.

"Recession risk is rising in the U.S. and Europe," ACC Chief Economist Martha Moore said. "We expect a shallow recession to emerge in the U.S. in early 2023, but a recovery should be in full swing in 2024."

That's not too different from a lot of other forecasts out there. (You can get Plastics News' Economics Editor Bill Wood's take on the situation in the Dec. 12 print issue.)

The problem with trying to make predictions is that there is so much still up in the air, from the U.S. Federal Reserve's attempts for a "soft landing" for the economy to global inflation, continuing impacts of the war in Ukraine.

Now add changes that may come in China as the government there responds to protests over "zero COVID" restrictions by loosening some rules.

"Though we are hopeful [for the easing of shutdowns in China] we caution that the road to reopening may be gradual, painful and bumpy," Chief China Economist Ting Lu for the Japan-based research group Nomura said, according to a Dec. 5 report from Reuters.

One big hurdle faced by the auto industry in the past few years isn't getting any better. A shortage of computer chips is continuing to hit carmakers. To put it simply, the situation is "flat-out chaos" in the supply chain, Volkswagen AG's VW brand chief Thomas Schaefer said Dec. 6 during an event in Berlin.

VW's main plant in Wolfsburg, Germany, is operating at less than half its capacity, he said.

VW's top purchasing executive Murat Askel said in October that the company is connecting with companies further down the supply chain and building a database to help it anticipate shortages.

"We never used to talk to mining operators — now we know their business model," Aksel said. "It is no longer enough to rely on Tier 1 suppliers. We need to look behind the curtains ourselves."

Packaging giant Amcor Ltd. has signed a deal to use up to 100,000 metric tons worth of chemically recycled polyethylene from ExxonMobil as part of its goal to use 30 percent recycled material across its portfolio by 2030.

The five-year agreement will focus on material supplied through ExxonMobil's Exxtend process, sourced from the company's Baytown, Texas, facility, which is expected to start up later this month, the companies said in a Dec. 5 news release.

Amcor said it will focus on using the PE in products for the health care and food industries, since those have high safety requirements for recycled plastics.