The future of the plastics industry in 2022
While some US plastics manufacturers are optimistic about the continuation relocation, the image of the global industry naturally remains a moving target given regional tensions, potential responses to the Omicron variant and other factors.
With cumulative data ending in September showing the plastics industry’s $ 1.4 billion trade deficit in the United States, “it is likely that the United States will experience another year of trade deficit in the area of ââplastics. plastics, although lower than last year, “wrote Perc Pineda, chief economist of the Plastics Industry Association (PLASTICS), in a December 15 press release.
While industry performance figures for the year 2021 are expected in January, Pineda noted in a December 10 interview with Plastics Today that forecasts based on the third quarter reports indicate:
- Machinery production in the United States is expected to grow 15.1% year-on-year in 2021, but will only increase by 1.9% in 2022. âIn the United States, we have had very large shipments of auxiliary machinery .
- It will take at least until the second quarter of 2022 to get “a better read of how far we need to go until we see the supply chain issues actually resolved.”
- The production of materials and resins will continue at a higher rate in 2022.
- Product production is expected to have increased by 3.3% in 2021 and will increase by 1.8% next year.
- Mold production is expected to have increased 3.8% this year and could increase 3.4% in 2022.
Robust growth through thick and thin
âWe have really had robust growth in 2021 despite the hurdles,â Pineda said, âbut as the economy returns to its long-term growth rate, so will the production of the plastics industry.â
In terms of gaining better control and visibility of supply chains, evidence of increased M&A activity for this purpose remains anecdotal at present, he said. he adds.
As for Industry 4.0 accelerating in the face of labor shortages, the ancillary machinery movement “tells you (manufacturers) are looking for ways to increase factory automation and efficiency.” AI) in the production of plastics, potentially hampering its adoption as manufacturers struggle to implement connectivity and data solutions.
Ultimately, Pineda said, the trend is for lower growth next year compared to this year. Much like the US economy on a macro scale, plastics are a mature industry facing strict constraints on growth, namely limited human capital.
âIf you look at some of the stats, our largest labor force cohort over the next 10 years will likely be 25 to 45 years old. Were they really trained for the making of the future? I do not think so. This skill set will always be lacking in our industry.
After Brexit, does the UK source resin from the US?
In the December 15 statement detailing Pineda’s conversation with economist Ingo Borchert, the UK’s position as a major US plastics trading partner and the broader trade outlook after the pandemic was discussed. discussions. Borchert warned: âI really hope we’re about to emerge at the other end of the tunnel. Yet right now the UK looks set to head straight for Wave Four, as do many other European economies. So, it might take a little longer until we see a full-scale recovery take hold. “
Borchert, a lecturer in economics at the University of Sussex Business School and deputy director of the UK Trade Policy Observatory, also assessed the effects of Brexit on UK plastic exports to the EU. âIn January 2021, UK exports of plastic and rubber products to the EU fell 44.3%, although these exports have since recovered somewhat and appear to have returned to average levels of 2017-2220. At the same time, UK imports of plastics and rubber from the EU show a persistent negative impact of around -25% on a monthly basis. It is not implausible to thinkâ¦ that some of these imports could now come from the United States.
Constant quotation volume over the last quarters
Meanwhile, Troy Nix, executive director of the Manufacturer’s Association for Plastics Processors, previewed preliminary fourth quarter member data ahead of MAPP’s annual State of the Industry report, due in January. At MAPP’s annual meeting on December 7, Nix revealed that, with input from over 100 organizations on hand:
- Sales volume: 73% of respondents indicated an increase in the third quarter.
- Unpaid debts: 28% said invoices were not paid on time.
- Backlog: 60% of transformers indicate a significant increase or increase.
- On time delivery: 30% indicate a decrease.
- Resin availability: 53% indicate a moderate or extreme impact of hardware unavailability.
- Resin manufacturing time: 83% say it increases or increases significantly.
- Resin price: 91% indicate a significant increase or increase.
- Lack of material: 2% indicated that they were not affected by shortages of cardboard, shipping containers, steel or trucking.
- Open positions: 57% indicate an increased need for manpower.
- Operator salaries: 78% say they are increasing.
- Temporary help: an increase of 43% since 2019.
Overall, Nix concludes, âSales volume has been very stable and strong throughout this year, and we are seeing a slight increase in the fourth quarter. If you’ve ever heard me talk about the state of the industry when I’m in the January-February period, the concept of having momentum in the last quarter as we move into a new year is very important to me. because I’ve been through situations – including the Great Recession – where that momentum wasn’t there, and the resulting year was very, very bad. Likewise, the citation volume has been ‘very consistent over the last few quarters’ and in the fourth quarter, ‘it still looks like we are strong for the new year.’