For the Manufacturers Association for Plastics Processors, the yo-yo economy for manufacturers is producing a lot of uncertainty and volatility with inflation, rising wages and resin prices top of mind.
That's prompting a harder look at automation among its members, the Indianapolis-based group said in a Jan. 24 webinar unveiling its 2023 State of the Plastics Processing Industry report.
"What does all this mean from a bottom-line perspective? I think we're struggling, " said MAPP Executive Director Troy Nix.
He pointed to "wacky" data in the survey of 204 companies — 92 percent of them injection molders — such as 41 percent of respondents saying sales decreased from the third to fourth quarters.
"This is a 33-point jump from last year when we did this," Nix said. "In 18 years, it's the largest jump I've ever seen in a negative context."
He pointed to a similar 38-point drop in the percentage of companies reporting that their sales increased quarter to quarter, compared to last year, saying it was "the largest drop in the history of this survey."
"Wacky numbers happen as a precursor to something very interesting in our economic conditions," Nix said. "I go to the major downside in the housing crisis in 2006 that led to the Great Recession. In 2019, we had similar spikes that led into our pandemic.
"I don't know what this is telling us, I'm just saying it's odd," he said. "And I don't like it."
The results were nuanced at times. The survey still showed overall sales up about 14 percent year-over-year in 2022, which was higher than the average annual increase from 2017 to 2020.
But it also showed that 8 percent of companies said they were unprofitable in 2022, compared with 6 percent in 2021 and more importantly, 0 percent in both 2019 and 2020.
"When I have 8 percent of the population saying they're running unprofitable, that makes the hair on the back of my neck stand up," Nix said.
The survey is an anecdotal snapshot that MAPP has been conducting of its 475 member companies and others for nearly 20 years. It asks questions about a broad range of business topics, including the impact of inflation, wage pressures and supply chain problems in the pandemic's aftermath.
Survey respondents noted unusual problems as companies may have over ordered during the worst of the pandemic supply chain problems and are now correcting back to 2020 levels.
The largest category of companies responding were small to midsized plastics firms with between 100 to 200 employees.