It's earnings season, and as publicly traded companies in the plastics sector report quarterly results, Bill Wood has some tips for what to watch.
"We know that last year, at this time, inflation was 8 percent. Companies were coming out in their earnings reports and stating publicly that they were getting pricing power, that volume may not have been increasing that fast … but that they could raise prices, and that they could pass the cost increases along. And that that was happening throughout the chain," Wood said in the October Numbers that Matter Livestream.
That's no longer the case, so Wood suggested that to get a true take on how plastics companies are doing, industry watchers need to do more than compare the current quarter to the same period a year ago. They also need to adjust the numbers for inflation
Wood also looked at whether the construction and plastics sectors have reached their cyclical low and when we can expect to see growth again.
"Both of these numbers are down pretty low. So we need a few months of trending upward just to get back to zero growth," he said.
Another economic statistic to watch: labor and unemployment data. Wood said companies have been hoarding labor, including in plastics, and he talked about whether that will continue and the impact it could have on wages.
Finally, Wood discussed the impact of the UAW strike on the automotive plastics sector, the European economy and how that's impacting plastics, and the prospects for a government shutdown.
The next Numbers that Matter Livestream is scheduled for Nov. 28. In the meantime, watch and subscriber to his Numbers Matter Shorts, which we post frequently to stay on top of economic news and the impact on plastics.
