The U.S. plastics market and the global economy both are facing slow recoveries from the COVID-19 pandemic, according to a pair of economists.
U.S. plastics exports and imports both were down for the year that ended in June, Perc Pineda said Oct. 22 during the 2020 Global Plastics Summit. Pineda is chief economist for the Washington-based Plastics Industry Association.
"There's a lot of uncertainty and a lot of moving targets based on the results of the pandemic," he said.
Mexico, Canada and China continue to be the largest trading partners of the U.S. plastics industry. The country has its largest trade surplus with Mexico and its largest deficit with China.
The U.S. plastics market continued to have an overall surplus in 2019 — because of exports of plastic resin — but Pineda said the size of that surplus has declined since peaking in 2010-11.
One possible impact of the pandemic could be the reshoring of more manufacturing work to the U.S., Pineda said. "Companies are more open to having domestic production," he added.
The effects of COVID-19 on the global economy could be long-lasting, according to Nariman Behravesh, chief economist with Houston-based IHS Markit.
"The virus is boss, whether we like it or not," he said. "Everything depends on the virus."
Behravesh said he expects global GDP to be down 4.5 percent this year — its worst decline since 1946. The global economy should recover to show GDP growth of 4.4 percent in 2021 and 3.7 percent in 2022, he added.
In the U.S., GDP for 2020 should decline by 3.5 percent. Chinese GDP will fall to just under 2 percent for the year.
Behravesh added that the recession of 2020 was the worst seen globally in 75 years, but it was extremely short, lasting only two or three months. This recession also impacted services more than manufacturing, unlike the recession of 2008-09.
A third-quarter bounce back could see GDP growth of as much as 33 percent in the U.S. and Europe, Behravesh said, but growth could fall as low as 2 percent for the fourth quarter.
"Pent-up demand is exhausted and consumers remain cautious," he added. "It could trigger a double-dip recession."
Although some manufacturing sectors will see a V-shaped recovery, interest rates will remain low, according to Behravesh.
"Trade is very resilient — which is a bright spot — but it will take two or three years for output to return to pre-pandemic levels," he said.
The Global Plastics Summit 2020 was an online event hosted by IHS Markit and the Plastics Industry Association.