Plastics Employment Outlook: Demand Stability Supports Labor Market Gains

Perc Pineda, PhD
Chief Economist, PLASTICS

Consumer Demand Supports Manufacturing Activity

Manufacturing activity is driven by downstream demand, taking its cues from wholesale trade and, ultimately, retail trade—which in turn is determined by consumer spending. Looking at inflation-adjusted personal consumption expenditures for nondurable goods, the latest available data as of November 2025 show that nondurable goods consumption rose 0.5% month-over-month and 3.3% year-over-year. Although consumption has been increasing on trend, it has remained below trend since February 2023.

In addition to nondurable goods, durable goods consumption has also shown an upward trend. In November, it increased 1.1% from October and rose 1.1% compared with October of the previous year. However, durable goods consumption was below trend for most of last year—except in March and April. Looking ahead, consumption could continue either above or below trend. Still, with positively sloped consumption trends, underlying demand remains supportive of continued production activity.

Steady Plastics Demand Amid Modest Manufacturing Growth

Because the manufacturing sector is the primary customer of the plastics industry, changes in manufacturing activity provide insight into plastics demand—and, by extension, plastics manufacturing employment. There is little doubt that U.S. manufacturing has been affected by higher tariffs, particularly for firms that depend on inputs and equipment not readily available domestically. The Industrial Production Index for manufacturing stood at 98.2 in December 2025, up 2.4 index points from January 2025, but still 1.8% below its 2017 level. In perspective, manufacturing has not fully returned to its 2017 benchmark. Against a backdrop of elevated interest rates—despite a lower Federal funds rate following three 25-basis-point cuts last year—and higher tariffs, plastics production has remained in relatively low gear, even as broader manufacturing activity continues to expand modestly.

The monthly plastics demand estimate, adjusted for inflation, averaged $22.8 billion in 2025 through November and has remained stable, with an average monthly change of -0.2%, marginally lower than the 0.1% average change in 2024. In both 2024 and 2025, plastics demand averaged roughly $22.8 billion—$22.763 billion in 2024 and $22.800 billion in 2025. With demand holding steady, supply is also likely to remain stable, suggesting that employment in the sector is more likely than not to remain steady as well—setting aside advances in manufacturing technology that could increase labor-to-capital substitution, provided production growth continues to align with demand.

Plastics Manufacturing Employment Starts Strong

Plastics and rubber products manufacturing appears to have started the year on solid footing. The unemployment rate declined from 4.7% in December 2025 to 1.1% in January 2026, which is down sharply from 8.2% in January 2025. Based on data going back to 2000, this was the lowest January unemployment rate on record for the sector. Over the past twelve months, unemployment in plastics and rubber products manufacturing ranged from 2.3% to 8.2%. Last year, the unemployment rate in the sector averaged 4.3%, compared with 3.3% a year earlier—largely in sync with the overall unemployment rate in the economy, which rose from 4.0% in 2024 to 4.3% in 2025.

Steady consumer demand, modest gains in manufacturing activity, and stable plastics demand collectively support a generally favorable employment outlook for the plastics and rubber products sector. That said, workforce supply constraints persist. Total sector employment was essentially flat between December 2025 (697.9 thousand) and January 2026 (697.8 thousand) and remained slightly below its year-ago level of 707.2 thousand (down 0.11%).

External pressures—including higher tariffs and elevated interest rates—continue to pose headwinds in the near term, while technological change brings both risks and opportunities. In an already highly automated and digitalized plastics manufacturing environment, productivity and competitiveness continue to improve, alongside rising demand for higher-skilled roles. Overall, the fundamentals suggest near-term employment stability, with scope for gradual gains as manufacturing activity strengthens and firms leverage new technologies for growth.