PF Blog

Forecast for Plastics Products: Momentum Will Build in Second Half of 2013

By: Bill Wood
29. November 2012

In the third quarter of 2012, the Federal Reserve Board’s data on the total output of plastics products (this is a measure of the volume of plastics parts manufactured) escalated by 4% when compared with the third quarter of 2011, and it was also up 1% from the second quarter of this year. The level of output for the U.S. has hit a plateau at current levels, but it will accelerate rapidly once the growth in the overall economy picks up. The Fed’s data measuring the industry’s rate of capacity utilization has also hit a plateau this year right around the 78%-level.
The Census Bureau’s data on the shipments value of plastics (this is a measure of the total dollar value received for plastics products) slipped in Q3 when compared with the previous quarter, but it is still up 4% year-over-year. The total volume of plastics products manufactured in the US is still about two years away from the pre-recession levels, but the total dollar value of the shipments of plastics products is near the all-time high.
Our forecast calls for the growth rate in the volume of plastics products to be a moderate 3% in 2012 when compared with 2011. The industry’s capacity utilization rate will hold mostly steady at current levels through the first quarter of 2013, and it will then rise. In 2013, the total volume of plastics products manufactured in the US will grow by 5% and the capacity utilization rate will exceed 80% by year’s end.
The long-term rise in materials prices will persist for the foreseeable future. The trends in the prices of crude oil and steel retreated in recent months, but they remain quite high by historical standards. The opposite is still true for the price of natural gas. Manufacturers should anticipate higher energy and material prices as soon the economic growth in the U.S. starts to accelerate. We continue to believe that higher materials and commodities prices will eventually provide a strong incentive for investment in plastics parts and new equipment over the long haul.
The major end-markets of plastics products are poised to increase their rate of growth as soon as aggregate demand starts to accelerate. The end-markets related to the housing sector (appliances and retail sales) are past their cyclical bottoms and are both expected to rebound in 2013. The upward trend in motor vehicle assemblies and medical products is well-established and will continue through the next couple of years. Production of computer products will benefit from the increases in both consumer spending and business investment that are also expected to accelerate in 2013 and beyond.

Comments are reviewed by moderators before they appear to ensure they meet Products Finishing’s submission guidelines.
blog comments powered by Disqus

Suppliers | Products | Experts | News | Articles | Calendar | Process Zones

The Voice of the Finishing Industry Since 1936 Copyright © Gardner Business Media, Inc. 2017

Subscribe | Advertise | Contact Us | All Rights Reserved