US – The Plastics Industry Association (PIA) has revealed that the US plastic industry is continuing to expand despite last year’s global economic struggles.
In its recent publication, the organization reflects on the development of the sector in relation to its supply chains.
According to the report, plastic production and exports of plastic molds beat 2021 records, while the demand for plastics machinery and the industrial capacity in plastics materials and resin manufacturing experienced a decrease.
PIA reveals that plastic production increased 3.9% between January and February – a 5.7% increase from February of the previous year. Production slowed thereafter, falling to 1.8% in November.
The weaker plastics production in the latter half of the year is consistent with lower overall economic growth.
“The US economy had negative output growth in the first half of 2022. Persistent high inflation rates, rising interest rates and lower disposable income caused a pullback on consumer spending, particularly on interest-rate-sensitive goods,” says Dr. Perc Pineda, chief economist at the PIA.
“However, a significant portion of plastics production ends up in nondurable goods consumption, which remains stable regardless of where the economy is in the business cycle.”
The organization also reported that monthly shipments of plastics and rubber fluctuated in 2022 between US$22.1 billion and US$22.5 billion. The number of shipments peaked in April and then decreased.
The PIA announced that exports of molds for plastics fluctuated monthly between US$36.7 million in February to US$54.3 million in August.
“Exports are usually the lowest during the summer months. However, exports of molds for plastics peaked in August before they decreased in the two months that followed,” added Dr. Pineda.
The report predicted exports of molds would average US$45.8 million monthly in 2022, which will be higher than US$44.5 million in 2021.
Even though the economy’s labor participation rate improved moderately from 61.7% in 2021 to 62.2% in 2022, the US plastics industry continued to experience labor supply constraints in 2022.
Hiring in plastic products manufacturing rose steadily in the first half of 2022 to 614.4 thousand, as the US Bureau of Labor Statistics estimated, but it slowed in the second half of 2022.
The publication also reveals that plastic material and resin prices peaked in June of 2022 based on the Producer Price Index on plastics material and resin manufacturing, according to the US Bureau of Labor Statistics. The prices then “continued to fall since supply eventually caught up with rising demand.”
The industrial capacity in plastics materials and resin manufacturing in the US increased in 2022. However, capacity was expected to increase by 1.9% in 2022 – lower than the 7.1% capacity increase in 2021.
“Lower growth rates in industrial capacity against the backdrop of falling resin prices suggest that there is sufficient plastics material and resin supply,” concluded Pineda.
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