Perc Pineda, PhD
Chief Economist, Plastics Industry Association
Consumer Spending Remains a Source of Strength
U.S. consumers kept the economy chugging along during the first six months of 2026. According to the U.S. Census Bureau’s Advance Monthly Retail Trade report, retail sales totaled $4.4 trillion in the first half of the year, a 5.1% increase from the same period in 2025. In June alone, seasonally adjusted retail sales reached $768.6 billion, up 6.7% year-over-year (YoY).
Several major retail categories that are important end markets for plastics posted healthy gains. Sales at motor vehicle and parts dealers increased 5.7% YoY, reflecting continued consumer demand for automobiles. Manufacturers have largely kept pace with that demand. The Federal Reserve’s Industrial Production Index for motor vehicles and parts manufacturing has increased on a year-over-year basis since April, rising 1.2% in June. That marks a notable turnaround from the 2.1% decline recorded a year earlier and the 6.2% drop in November 2025.
Broad-Based Demand Across Plastics End Markets
Electronics and appliance stores also recorded strong performance, with combined retail sales increasing 8.6% YoY. Demand for electronics continues to benefit from the rapid adoption of artificial intelligence technologies, which depend on computers, data centers, networking equipment, consumer electronics, and increasingly sophisticated vehicle electronics—all of which rely extensively on plastics for components, housings, wire insulation, and connectors.
Appliance sales, meanwhile, remain closely linked to the housing market. Although new home sales declined 6.8% in May following a 10.7% decline in April from a year earlier, consumers continued purchasing replacement appliances and home electronics, supporting retail activity in this category.
Other retail segments also posted healthy gains. Sales at sporting goods, hobby, musical instrument, and bookstores increased 15.2% YoY in May. Nonstore retailers, led by e-commerce, recorded a 14.2% increase, while miscellaneous store retailers and department stores posted gains of 6.0% and 3.7%, respectively. Food services and drinking places recorded a 3.8% increase. These sectors encompass a wide range of products manufactured from plastics or packaged in plastic materials.
Demand for essential goods also remained steady. Food and beverage stores recorded a 1.0% increase in retail sales, with grocery stores rising 0.9% YoY in May. Likewise, health and personal care stores posted a modest 0.2% increase. These categories tend to be less sensitive to economic cycles because they primarily consist of necessities, resulting in more stable—but slower-growing—consumer spending. For plastics manufacturers, this translates into steady underlying demand for packaging, medical products, and household goods.
Consumer Spending Remains a Tailwind
Overall, the first half of 2026 reinforced the resilience of consumer spending despite ongoing economic concerns. Growth across many of the retail sectors that are important to plastics—including motor vehicles, electronics, sporting goods, and e-commerce—provides a favorable backdrop for demand through much of the year.* While spending on essential goods remains comparatively stable, the breadth of retail sales growth suggests that consumer demand continues to provide an important foundation for plastics manufacturing and the broader plastics value chain.
* The monthly Plastics Demand Estimate for May can be accessed here.
