Ned Monroe is the president and CEO of the Vinyl Institute, a Washington-based trade group that represents leading U.S. producers of vinyl (PVC), vinyl chloride monomer and vinyl additives and modifiers.
The U.S. vinyl industry includes almost 3,000 manufacturing facilities, more than 350,000 employees and an overall economic value of $54 billion.
Monroe has led VI since 2018. His previous experience includes positions at S.C. Johnson and the National Association of Manufacturers. He recently took some time to share his insights on issues currently affecting the vinyls market.
Q: What have been the biggest growth markets for PVC so far in 2022?
Monroe: The building and construction sector continues to be the biggest market sector for PVC, with PVC pipe accounting for 47 percent of PVC resin produced in the U.S., followed by fencing, decking, flooring, and molding (11 percent) and vinyl siding (9 percent). The recent federal infrastructure funding, which provided $55 billion for water infrastructure funding, has helped the ongoing growth in the PVC pipe market.
Q: What impact is the market seeing from inflation and also from higher interest rates, which could affect construction activity?
Monroe: Great question, and one the entire vinyl industry is watching. Inflation and higher interest rates are impacting the housing marketing. And since construction accounts for more than 70 percent of PVC use, any downturn in residential or multifamily housing could have an impact.
However, federal infrastructure spending will soften any slowdown. Improving the nation's water infrastructure is a focus for the federal government over the next five years, and PVC pipe will play a significant role in that effort. In addition, vinyl siding, luxury vinyl flooring and vinyl roofing are quality products that are often a first choice since they are affordable, more durable than competitors and all products face the same inflationary pressures.
Q: What new applications have the most potential for PVC?
Monroe: Our team is pretty excited about the opportunities in electric vehicles and charging stations. Multiple provisions in the recently passed federal Inflation Reduction Act include an increase in electric vehicle manufacturing and use. The increased production will bolster the demand for PVC and other lightweight plastics, which are essential to the production of EVs but are also an integral component of the wiring conduit used in EV charging stations. Our vinyl recycling program is also generating a lot of buzz. Stay tuned.
Q: What other regulatory issues is the market facing?
Monroe: We need to get the PVC MACT [maximum achievable control technology] rule finalized. The U.S. PVC industry and the EPA have been working on this rule since September 2012, and 10 years later, there still isn't a final decision or path forward to correct the problems with the original rule.
Why is this important? Without a new PVC MACT, the U.S. PVC industry is challenged with building new greenfield facilities to meet expanded global consumer needs for quality PVC resin. In addition, the Vinyl Institute is coordinating three testing consortia under the Toxic Substances Control Act (TSCA). Working with the industry and the Environmental Protection Agency, we are ensuring proper safety data to protect our workforce, our communities and our customers.
Q: Expectations for 2023? Do you see demand stabilizing?
Monroe: I see continued growth for U.S. PVC resin. We manufacture the highest-quality PVC globally and continue to produce it at a competitive price due to the abundance of U.S. natural gas. In addition, as I've mentioned, the federal funding for improving our nation's water infrastructure over the next five years will require quality PVC pipes. We see PVC pipes playing a significant role in rebuilding our nation's water and wastewater lines.