PLASTICS Global Trends report shows bright outlook

Despite the COVID-19 pandemic, the U.S. plastics industry in 2020 continued to be a strong player internationally, according to a Plastics Industry Association (PLASTICS) Global Trends report released at the Fakuma trade show. The report analyzes trade data from all of 2020 and the first six months of 2021. 

According to report’s executive summary, released Oct. 12, the U.S. plastics industry’s trade balance — representing its resin, plastics products, molds and machinery footprint — fell to a $5.5 billion deficit in 2020, from a $700 million surplus in 2019. At a time when domestic production capacity and employment faced constraints, spending apparently went toward imports. 

Meanwhile, according to the report’s executive summary, “The apparent consumption of plastics products fell 0.4 percent from $216.9 billion in 2019 to $216.1 billion in 2020. As measured by the Producer Price Index, plastics products prices realized by U.S. producers fell 0.7 percent in 2020, suggesting that apparent consumption grew 0.3 percent in real terms.” 

PLASTICS Chief Economist Perc Pineda said the outlook for the industry has improved since 2020. 

“Although the merchandise trade outlook is much brighter this year, uncertainties remain and depend largely on global economic recovery. While the U.S. plastics industry trade volume rose 27.9 percent in the first six months of 2021 compared to the same period in 2020, it still has a plastics trade deficit,” Pineda said. “The large and growing plastics industry outside the U.S. will continue to compete with the U.S. for overseas markets as well as for their own domestic markets.” 

In 2020, the country’s largest export markets remained Mexico — with a value of $13.7 billion — and Canada, at $11.7 billion. 

According to the executive summary, weak economies typically erode trade deficits, but the unusual circumstances of the COVID-19 pandemic upended that expectation.  

“It was thought that an economy in recession would see its trade balance improve, but that did not happen in the COVID-19 recession,” the summary states. “The U.S. plastics trade surplus became a deficit in 2020. Data through the first half of 2021 show continued deterioration. One hopes for a bounce-back, but the proposed taxes on plastics and its raw materials would likely stimulate more offshoring of plastics activities.” 

The report examines all aspects of the U.S. plastics import and export trade — machinery and molds, products and resins. Among its machinery findings: At $2 billion in 2020, the trade deficit for U.S. machinery was about the same as the previous year; meanwhile, shipments of machinery within the country rose 5 percent. Apparent consumption of plastics machinery rose 2.6 percent from $5.7 billion in 2019 to $5.8 billion in 2020.  

The study authors end the Forecasts section of their executive summary on a mostly positive note: “Now that the economy is growing again, [a] healthy increase in apparent consumption can be expected. The authors forecast a 4.5 percent annual increase in plastics apparent consumption between 2020 and 2027 if adverse tax policies do not get in the way.”