Perc Pineda, PhD
Chief Economist, PLASTICS
June 3, 2025
The second estimate of U.S. GDP for the first quarter showed a modest revision, with growth edging down to 0.2% from the initial 0.3%. Personal consumption expenditures (PCE) remained unchanged at 1.2%. Consumer spending slowed, particularly in durable goods, which declined 3.8% following a 12.4% surge in the fourth quarter of last year. Nondurable goods performed better, rising 2.2%, although slightly below the previous quarter’s 3.1% gain. Service consumption also decelerated, increasing 1.7% compared to 3.0% in the prior quarter.
Plastic Packaging Implications
Plastic continues to be a material of choice in packaging due to its versatility, cost advantages, and functional benefits. Brand owners across industries rely on plastic packaging not only for its lightweight nature—resulting in lower transportation costs and thus, its much lower carbon footprint—but also for its ability to extend the shelf life of food and beverage products. Vitally important, plastic packaging materials are also recyclable.
A key data point plastics professionals should monitor is PCE on nondurable goods. This metric serves as a broad proxy for packaging demand—particularly in food and beverage applications. Nondurable goods consumption in the first quarter was estimated at $3.5 trillion, up from $3.3 trillion in the same period last year, marking a 2.9% year-over-year increase—an indication of growing market potential for plastic packaging.
Within this segment, food and beverage remains a vital application for plastic packaging. This $1.2 trillion market grew 3.7% in the first quarter from a year earlier. Since 2000, the year-over-year growth in PCE for food and beverages has averaged 4.3%; excluding recession years, the average is 3.4%.
Sizing Up Segment-Specific Markets
Plastics professionals are continuously challenged to benchmark growth targets, particularly for specific applications. According to IBISWorld, the U.S. plastic bottle market can be segmented into four product groups: beverage bottles (43.1%), food bottles (30.0%), household bottles (13.8%), and automotive/industrial product bottles (13.1%). These market shares offer valuable insights when correlated with segment-specific consumption or market values.
One way to assess market opportunities for plastic bottles is to examine the consumption value of key product categories. For example, PCE for mineral waters, soft drinks, and vegetable juices was estimated at $84.6 billion in the first quarter—up slightly from $84.3 billion a year earlier. Consumption of fresh milk and fats and oils stood at $24.9 billion and $22.5 billion, respectively. Spending on household cleaning products, another relevant category, was estimated at $32.9 billion. These figures offer a perspective on the retail markets served by plastics processors. The same analysis can be applied to other components on nondurable goods consumption.
While PCE is a lagging indicator, changes in consumption have implications for production planning and inventory management. Since lead times vary across manufacturers, tracking consumption trends helps processors anticipate shifts in capacity utilization and align production accordingly.
Despite the slight downgrade in first-quarter GDP growth, consumption of nondurable goods—most of which are price inelastic, particularly those tied to plastic packaging—remained stable. This resilience underscores the continued relevance of sustainable plastic packaging in meeting everyday consumer needs, supporting supply chain efficiency and overall market circularity.
