Numbers that Matter
Economics Editor Bill Wood says we’re going to be “inundated with bad news at a rapid rate” as the Fed tries to tame inflation without sending the economy into a recession. But he adds there’s no reason to panic, and his outlook for the rest of the year is “balanced.” Going forward, plastics company managers should keep an eye on real estate and construction data, consumer spending and employment data.
Plastics News Economics Editor Bill Wood says that inflation is settling in for an extended period, but don't believe the hype from predictions trying to forecast a recession.
Despite all of the turbulence reflected in some other sectors, total U.S. construction spending increased by a robust 12 percent in the first quarter when compared with the same period in 2021.
Plastics News Economics Editor Bill Wood says it is easy to get overwhelmed by all the factors hitting the U.S. economy right now, but there's no reason to panic. "At this point, nothing seems like it's in a freefall or in any out-of-control situation."
Bill Wood: "Markets have acknowledged the Fed's desire to fight inflation with an increasingly aggressive program of raising near-term rates, but it is unclear how this program will work out in the longer term."
Bill Wood: "The U.S. economy has recently been hit by two significant supply shocks: the global pandemic and now the crisis in Ukraine. Prior to Russia's invasion, the rate of inflation in the U.S. was already at levels we have not seen in decades. After the attack on Ukraine, prices for commodities such as oil, industrial metals and grains spiked."
Will conflict in Europe add to turmoil for North American plastics processors? In the February Numbers that Matter Live, Economics Editor Bill Wood also covers dealing with inflation, higher interest rates, rising energy prices, supply-chain issues, tariffs and the shift to a more circular economy. It won’t be easy, but there are “tremendous opportunities” for innovative companies, according to Wood, who has tracked the plastics industry for more than 30 years.
Bill Wood: "The U.S. economy is overheating. The irony of that statement is not lost on me as I write this in the middle of winter, and as our nation finally approaches what I hope is the end of a two-year pandemic."
It’s been decades since inflation had a significant impact on the U.S. plastics industry. Economics Editor Bill Wood discusses how higher prices, including for labor, energy and raw materials, will impact the supply chain.
Rising energy prices not only push materials prices higher, but also they push up the cost of running our factories. Resin prices do not follow every wrinkle in the oil market. But, over time, the correlation is quite robust.