The U.S. Plastics Industry in 2020 in Seven Charts

December 23, 2020

As we count down to the close of the year, the U.S. plastics industry’s performance in 2020 can be summarized in seven charts. While these charts are not all-inclusive, they provide an overview of the industry’s performance this year against the backdrop of the coronavirus pandemic.

Perc Pineda, PhD

Chief Economist

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As we count down to the close of the year, the U.S. plastics industry’s performance in 2020 can be summarized in seven charts. While these charts are not all-inclusive, they provide an overview of the industry’s performance this year against the backdrop of the coronavirus pandemic. November and December data are based on PLASTICS’ projection, while data for both months are still to be released by the U.S. government agencies.

  1. Industrial Production of Plastics Products Manufacturing

The U.S. economy slowed dramatically in the second quarter, adversely affecting the economy’s manufacturing sector. The economy’s total output fell by 31.4%.  Plastics production fell 6.5% in April from an 8.7% increase in March. Thereafter, as aggregate demand picked up, plastics production increased 12.0% in October and is projected to increase around that rate through December.

  1. Plastics and Rubber Shipments

Following an 11.0% decline in plastics and rubber shipments in April year-on-year, shipments have been increasing but remain lower than a year ago. The latest estimate from U.S. Census Bureau shows the October value of shipments 2.2% lower than October last year. With modest increases estimated for November and December, 2020 could close with shipments 1.6% lower than a year ago. 

  1. Plastics Manufacturing Employment

Plastics products manufacturing lost 65,400 jobs in April based on U.S. Bureau of Labor Statistics (BLS) estimates. While May and June saw 22,700 and 20,100 job gains, respectively, as of October, plastics products manufacturing added 50,500 jobs. In the BLS November jobs report, plastics and rubber products manufacturing added 4,600 jobs—the most added in the nondurable goods manufacturing sector. Plastics products manufacturing jobs in November most likely rose more than 3,000 in November. If the uptick continues, we could see another bump of above 1,500 jobs in December. Still, 2020 will close with plastics products manufacturing jobs below pre-COVID-19 levels.

  1. Molds for Plastics Trade

Year-to-date ending in October, U.S. exports of molds to Mexico and Canada totaled $302.0 and $80.2 million, respectively. As of October, Mexico was the largest U.S. export market of molds for plastics. Canada, on the other hand was the U.S.’s largest source of imported molds—$631.4 million. It is unlikely that U.S. trade patterns on molds for plastics with its USMCA partners changed in November and December. Globally, U.S. exports of molds dropped 48.5% in April from a year ago. However, with exports increasing beginning in May, exports in November and December can be expected to be around $48.0 million in both months, resulting in a total export of about $556.7 million in 2020.

  1. Producer Prices in Plastics Material and Resins Manufacturing

The producer price index on plastics material and resins manufacturing, from the U.S. Bureau of Labor Statistics, began to decline in March and continued to decline through May, in sync with the pick-up in plastics production. Hence, the demand for plastics materials caused prices to rise along with factors in the supply side due to logistics-related bottlenecks as the economy remains in the reopening stage. Both demand and supply factors could continue to buoy plastic materials prices through the close of 2020.

  1. Capacity Utilization in Plastics Material Resins Manufacturing

Plastic material and resins capacity utilization could average 85.0% this year—lower by 1.8 percentage points from last year. This year saw capacity utilization in material and resins manufacturing at a low of 82.0% in April and a high of 88.2% in January before the COVID-19 shutdowns. Plastics material and resin manufacturing was the sector of the plastics industry least affected due to the pandemic.

  1. Plastics Machinery Imports

U.S. imports of plastics machinery started to increase in June after declining for four consecutive months. While we can still expect the value of plastics machinery imports this year to be lower than last year, expect 2020 to end with a positive note. The trajectory of imports can be a gauge of the direction of demand. It is now clear that the previous double-digit dip projected for plastics machinery business activity this year was overestimated.

The pandemic adversely affected the economy—and the plastics industry and its end-markets were not exempt. However, some end-markets rebounded quicker than expected. Plastics play a critical role in the production of medical equipment and supplies to fight COVID-19 and are prevalent in consumer essentials—as products and packaging material. For these reasons, the plastics industry experienced moderate declines in 2020 from 2019, despite the pandemic.

The post-COVID-19 period cannot possibly come fast enough for everyone. Still, there will be residual effects of the pandemic. While the plastics industry is poised for growth next year, it needs to be mindful that the economy is still to reopen fully. This means business investment and consumer spending next year will still be constrained until this health crisis is fully resolved and the economy is on a solid footing. Policy and regulatory uncertainties next year could impact the plastics industry’s demand-supply dynamics, which could require tactical strategies from companies to maximize revenue.

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