As we start 2025, the plastics industry is navigating significant economic challenges including inflation, rising energy costs, and evolving market demands.
In the January Numbers that Matter editorial livestream, PN Economics Editor Bill Wood went into detail about the risks and opportunities facing North American plastics companies, starting with the potential for higher inflation because of rising energy, raw material and labor costs. Watch a recording of the program below.
“Well, just for context, inflation or price increases have resulted in higher interest rates, it's either the Fed adjusting their Fed funds rate or the bond and treasuries market adjusting their yields through buying and selling supply and demand. So higher interest rates accompany higher inflation one way or the other and in the past couple of years, if you look at the data, the plastics industry … has not fared very well in a high interest rate environment,” Wood said.
“And so what, what this industry needs, in my opinion, is lower interest rates and price stability. And in my opinion, right now, one of the biggest risks to the overall U.S. macro economic outlook is the risk of high inflation accelerating, re-emerging, coming back,” he said.
Wood said the auto industry had a strong fourth quarter, although the outlook is uncertain in part because of changing policy regarding battery electric vehicles. The housing market remains poor, which he said has a big impact on much of the plastics supply chain.
The next Numbers That Matter Live is scheduled for Tuesday, Feb. 25. Wood will also speak at the Plastics News Executive Forum, set for March 10-12 in La Jolla, Calif.