The Victorian novelist Charles Dickens gets a lot of attention this time of the year, thanks to his perennial favorite A Christmas Carol. But manufacturers may be seeing a twist on another of his classics, A Tale of Two Cities. Think of it as a tale of two economies.
Plastics News Economics Editor Bill Wood notes that there has been plenty of solid economic news in the U.S. the past few months. Inflation rates have slowed down, employment numbers have held steady, and the Federal Reserve has paused interest rate hikes.
So why aren't manufacturers feeling much better than they were a couple of years ago?
Because the U.S. economy is so heavily reliant on the service sector, the national economy reflects that. Manufacturers, meanwhile, haven't seen that boost.
"The total manufacturing sector is still making money; it is just not making as much as it was a year ago," Bill writes in his final Numbers That Matter column for 2023. "The same can be said about the plastics industry: As of the third quarter of this year, the overall industry remains profitable, but margins are shrinking at an accelerating pace."
A few end markets, such as health care, have been stronger than others, but most won't see a return to the best of times, as Dickens might put it, until sometime in 2024.
You can also catch Bill's thoughts via his Numbers That Matter Shorts video here.