Economic data releases from earlier this month point to a U.S. economy that ended 2017 on a high note. The unemployment rate was unchanged in December at 4.1 percent, according to the latest report from the Bureau of Labor Statistics (BLS). Average hourly earnings for all employment rose by nine cents—a 2.5-percent increase over the course of the year. An uptick in wages is a noteworthy development for the U.S. economy, where personal consumption expenditures make up 69 percent of gross domestic product.

Total jobs growth in 2017 was 2.1 million with 155,000 and 196,000 jobs added in construction and manufacturing, respectively. Hiring in these two sectors suggests the presence of housing and durable and nondurable goods demand that still needs to be met. To that end, the value of plastics shipments rose 0.3 percent in November, the most recent government data available, with work in progress (meaning products that are currently undergoing fabrication) up 1.7 percent.

The latest report from the U.S. Census Bureau showed construction spending up 0.8 percent in November—a 2.4 percent increase from November 2016 as shown in the table below. 

Residential construction, in particular rose 1.1 percent—7.9 percent higher than November 2016. Although nonresidential construction rose 0.6 percent, there are sectors in nonresidential construction that continue to show signs of strength as shown in the table above. Commercial construction, for example, was up 1.2 percent in November and 7.9 percent from November the prior year. Positive construction numbers should particularly boost vinyl, which is widely used in building and construction applications.

Last year ended with the Institute for Supply Management (ISM) manufacturing index at 59.7 in December—up from 58.2 in November. A reading above 50 indicates growth in manufacturing, which accounts for roughly 12 percent of the U.S. economy.

While a slower decline in the unemployment rate can be expected as the economy is now operating at full capacity and the labor market continues to tighten, the recent positive signs on economic activity suggest that the chances of sustaining robust activity in the plastics industry remain strong. There are certainly more tailwinds than headwinds for the plastics industry as it enters 2018.