Clearwater Beach, Fla. — The U.S. plastics industry is on track to return to its long-run economic growth trend of around 2 percent per year.
That's the expectation of Perc Pineda, chief economist with the Plastics Industry Association in Washington. Pineda spoke Feb. 28 at the Plastics News Executive Forum in Clearwater Beach.
"There's still the question of if the economy will have a hard landing or soft landing, but plastics is a mature industry that tracks GDP," Pineda said.
He projected U.S. GDP (gross domestic product) growth of 1.4 percent this year and 1 percent for 2024. Canada should see GDP growth of 1.5 percent in both of those years, Pineda said, with Mexican GDP growth at 1.7 percent for 2023 and 1.6 percent for 2024. GDP growth in China and India should be higher at 3-6 percent.
Interest rates should remain relatively high this year, Pineda said, as the U.S. continues to try to control inflation. He added that U.S. industrial production is expected to be flat in 2023, even as supply chain pressures facing the plastics industry are decreasing.
"I don't see demand destruction in plastics," Pineda said. The plastics market currently ranks as the sixth largest manufacturing industry in the U.S., based on the value of shipments.
Pineda added that household spending could be down this year, since consumers "no longer are overstocking on products or goods" as they did during the COVID-19 pandemic. Home sales also are expected to be down, with sales of cars and light trucks "on the low side." Businesses also have pulled back on investments in equipment, which had been on the rise until recent quarters.
Pineda pointed out that, in spite of criticism of plastics, coffee giant Starbucks recently launched a new line of plastic cups at its locations.
Labor remains the biggest challenge for plastics firms, Pineda said, although the industry has managed to increase output even as its number of employees has decreased over time.
In September, the Plastics Industry Association released its annual Size & Impact Report. The 2022 report showed that shipments grew 1.2 percent to $468 billion in 2021 after declining 0.9 percent in 2020. The number of plastics industry locations also increased to 12,662, a rise of 0.2 percent vs. 2020. Processing facilities accounted for about 83 percent of that total.
Among individual states, Ohio led the way with 75,100 plastics jobs, ahead of California and Texas, which each employed 73,100. Those were followed by Michigan (64,300) and Illinois (52,700).
The report also looked at the plastic products content of final demand by industry. That content was measured in cents per dollar of final demand. Based on that metric, soft drinks and ice led the way with 12.1 cents of plastics content per dollar of final demand.
Snack foods were a close second at 11 cents per dollar. Toilet preparations came in third at 8 cents, with surgical and medical instruments in fourth place at 5.9 cents.