The second half of 2021 is just barely underway, and in the next few days we will be deluged with an array of economic data and corporate earnings reports from the second quarter. This is the perfect time to review our forecasts and plans from the early part of this year, compare them with the actual data as it becomes available and make any necessary adjustments for the rest of the year.
As this year got started, there were three dominant themes in my forecasts for the U.S. economy and plastics industry. The first important theme was the U.S. economy would enjoy accelerating growth in 2021 at a higher rate than the long-term average. The combination of lower rates of COVID-19, rising rates of vaccinations, a huge amount of fiscal stimulus from the federal government and a rapid recovery in the labor market would all promote a robust increase in a wide spectrum of overall consumer activity, and this would generate strong gains in total GDP.
The second theme was there would be a gradual rotation in the consumer spending data away from goods and into services. This did not mean I expected consumer spending on goods, either durable or nondurable goods, to decline. In fact, I forecast solid gains in total spending for goods this year. But my forecast called for a deceleration in the pace of growth in spending for goods, and at the same time, the rate of growth in spending on services would start to accelerate.
The third theme was the growth in the data that measures total output for the overall U.S. plastics industry would also exhibit positive growth this year, but the annual rate of growth for plastics would be slower than the pace observed in the economy as a whole. The plastics industry data performs best when the economy is strong, but I expected a number of factors would restrain the growth rate this year. These factors included both the macrorotation away from goods and into services, and also the industry-specific issues of increased regulations and market deselection of many types of plastic products.