The Leader - January/February 2009 - (Page 41)

Plastics: Hoping for Resiliency in Resins by bailey Webb ike many sectors, the U.S. plastics industry faces a tough 2009, but not without light at the end of the tunnel. And that’s not to say the picture is completely bleak. Plastics, the United States’ third largest manufacturing industry, currently is faring better than many manufacturing-based industries, with flourishing exports around the world. Yearover-year plastics exports grew 10 percent in 2007, according to The Society of the Plastics Industry, (SPI). Subsequently, the industry’s overall trade surplus nearly doubled, from $5.8 billion in 2006 to $10.9 billion in 2007, a total partially attributable to a slight decline in plastics imports. For the same period, total exports increased from $43.4 billion to $48.4 billion, while imports decreased slightly from $37.6 billion in 2006 to $37.5 billion in 2007. For the first eight months of 2008, the U.S. plastics industry continued to hold market share with an overall trade surplus of $11.2 billion. With the help of a weak L dollar, exports increased 13.8 percent over the same period, while imports increased 5.1 percent. Over the past four years, resin exports tripled to $2.9 billion, with Canada and Mexico serving as leading trade partners. The U.S. still has a $4.7 billion deficit with China, but U.S. exports have doubled over the past four years, SPI reports, to $3.6 billion in 2007. “Exports were the bright spot,” said Neill Pratt, senior director of international trade at SPI. “The good news is that no specific country or region accounted for this acrossthe-board increase.” As a whole, though, the U.S. plastics industry slowed along with the overall economy. Production was flat at $271 billion, down from $275 billion, and the total value of industry shipments, including wholesale trade and captive plastic products, declined from $379 billion to $374 billion. A 1.3 percent decline in domestic demand primarily drove the decline, according to SPI. Still, the U.S. plastics industry has weathered a storm over the past five years. Total 2 0 0 9 th e le ade r employment decreased approximately 30 percent to 1.1 million, with a loss of more than 322,700 jobs. With that, 2,311 plastics facilities closed since 2002, and new capital expenditures fell from $13 billion in 2002 to $10.2 billion in 2007. External challenges hampered the U.S. market, too. Energy prices, the world’s second-highest corporate tax rate and China’s currency situation didn’t help the situation for U.S. plastics manufacturers, and consolidation and off-shoring continued to whittle away at U.S. plastics’ employment and the total number of facilities. Despite the industry's difficulties, it’s still a $500 billion business in the U.S., but now faces the global finance crush and recession facing nearly every industry outside of bankruptcy law. “The U.S. plastics industry is resilient, and, despite numerous challenges, is ready and able to compete,” Pratt said. “The key question, which is on everyone’s mind, is how long this crisis will last.” Additionally, declining energy and oil 41 january / february

Table of Contents Feed for the Digital Edition of The Leader - January/February 2009

The Leader - January/February 2009 Contents Leadership Message from the CEO Real Estate in the News Mergers and Aquisitions Assessing Green Building Performance Measuring Space You Actually Use Global Trends in Sustainable Real Estate Whirlpool’s Lee Utke Northmarq’s Kevin Farrell Plastics: Hoping for Resiliency in Resins Regional Profile: Heartland Holding Strong Industry Profile: Ascendas Brings New Age Business Space to Asia-Pac Industry Tracker From the Applied Research Center Discovery Forum Findings Capital Corner Career Development Young Leader Economic Development in the News Learning Spotlight Connect With CoreNet Global Index of Advertisers A Look Ahead In our Next Issue Calendar of Seminars

The Leader - January/February 2009

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