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Domestic demand for plastics industry goods grew 6.5 percent in 2013

Article-Domestic demand for plastics industry goods grew 6.5 percent in 2013

Domestic demand for plastics industry products grew at a record-breaking pace in 2013, according to a report released by the Society of Plastics Industry (SPI). The U.S. plastics manufacturing industry is a $374 billion sector that employs 900,000 with representation in each of the nation's 50 states.

The 2014 Global Business Trends report, which will be discussed in detail during a webinar Dec. 10, 2014, indicates that the domestic demand for plastics industry goods grew 6.5 percent, from $251 billion in 2012 to $267 billion in 2013. The previous high was $262.6 billion in 2006.

"Surpassing previous consumption levels confirms that the U.S. plastics manufacturing industry is a major player in the world's economy," said William Carteaux, SPI's president and CEO. "While U.S. exports of raw materials continue to show profitability thanks in part to increases 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."

The U.S. resin trade surplus has grown in dollar terms, falling off slightly during the 2008-2009 recession, and again in 2012-2013 because of strength in the U.S. economy relative to the rest of the world. SPI says that U.S. manufacturing trade balance has improved in part due to "reshoring" or the return of manufacturing operations that had been "offshored" to other countries. In addition, the U.S. has become more competitive in four main respects: low wage inflation, a lower-valued dollar, high productivity and abundant energy.

Meanwhile, exports resumed growth in 2013, recording a 2.7 percent increase across most sectors (resins, plastic products and molds), excluding machinery. However, SPI noted that machinery sales and exports historically expand on a triennial basis in conjunction with NPE, (NPE2015 is scheduled March 23-27, 2015, in Orlando, FL). 

Due to the the "flourishing" domestic market, more production was needed in 2013 to meet the demand. The ratio of industry exports to domestic shipments fell from 22.2 percent in 2012 to 21.5 percent in 2013, another sign of an improving U.S. economy.

As has been the case in recent years, Mexico and Canada remain the U.S. plastics industry's largest export markets, with $14.9 billion in exports going to Mexico and $12.5 billion to Canada in 2013. The industry had its largest trade surplus with Mexico in 2013, at $10.8 billion, which is largely attributable to the North American Free Trade Agreement (NAFTA). U.S. plastics companies continue to take advantage of duty-free access to Mexico's market, and this should serve as an indication of the potential positive trade benefits that await the U.S. should it successfully conclude negotiations on the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

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