Friday, December 5th, 2014
SPI released its 2014 Global Business Trends report this week, and revealed that, to put it mildly, last year was a good one for plastics.
Worldwide demand for U.S. plastics industry goods hit record levels in 2013, growing by 6.5 percent from $251 billion in 2012, to $267 billion last year, which exceeds the $262.2 billion record set in 2006, before the recession was a twinkle in the global economy’s eye. “Surpassing previous consumption levels confirms that the U.S. plastics manufacturing industry is a major player in the world’s economy,” said SPI President and CEO William Carteaux, noting that “while U.S. exports of raw materials continue to show profitability thanks in part to increase in shale gas supplies, domestic demand holds the key to a wealth of job growth and economic benefits for firms that invest in the nation’s manufacturing renaissance.”
Exports also resumed their growth in 2013, the report noted, notching a 2.7 percent increase across most sectors (resins, plastic products and molds), excluding machinery. Companies in the machinery sector shouldn’t fret too much, however, as sales and exports of machinery typically expand every three years on account of NPE, the premier international plastics showcase put on by SPI, which will occur next in March 23-27, 2015 in Orlando, Fla.
More than just the positive growth in domestic demand along with exports, the 2014 Global Business Trends report also suggests a solid basis for future growth throughout the entire industry, particularly in the U.S., where the manufacturing trade balance improved in this year’s report in part due to “reshoring,” whereby companies return previously “offshored” manufacturing operations to the U.S. Additionally, the U.S.’ flourishing domestic market required more production in order to adequately meet demand, and the ratio of industry exports to domestic shipments fell from 22.2 percent in 2012 to 21.5 percent in 2013, yet another sign of an improving U.S. economy.
Ultimately the U.S. is becoming more and more competitive in manufacturing because of four main characteristics: low wage inflation, a lower-valued dollar, high productivity and increasingly abundant energy resources. Taken together these elements suggest a bright future ahead for the industry and a great deal of opportunity, in the U.S. specifically.
For more insight into SPI’s 2014 Global Business Trends report and to learn what reshoring and increased domestic demand will mean for the U.S. plastics industry, join SPI President and CEO William Carteaux for a free webinar at 2 p.m. (EDT) next Wednesday, Dec. 10. Register today here.