Mexican economy key in driving forward plastics industry throughout NAFTA region, study says

Flags of USA, Mexico and CanadaRecent developments in shale gas extraction have stimulated the polymer market in the NAFTA region by providing cheap polymer feedstock and facilitating an increase in domestic manufacturing productivity through low energy and operational costs. That is one of the big contributing factors to the growth of the flexible packaging market in North America, according to a new report from AMI International, a consultancy based in Bristol, UK. 

The report, Polymer Demand in NAFTA,covers the third largest regional polymer market in the world and includes the world’s second largest economy in terms of purchasing power parity. Overall, the North American polymer market is forecast to grow 2.7% a year through 2022, with a moderate variation between the slowest growing market of Canada and fast-growing Mexico. Home to some of the industry’s leading polymer producers with pioneering production capabilities, the technological prowess in the U.S. has enabled development across the entire plastics supply chain, the report noted.

A 58% increase in natural gas extraction is forecast between 2017 and 2040, which suggests that the United States will have a raw material and electric power cost basis that is on par with the Middle East. 

Increasing globalization, market maturity, elevated environmental awareness combined with the success of the automotive industry, growing penetration of plastic in flexible packaging and a resurgence in construction activity has enabled the plastics industry to prosper in the North American market. Polyethylene and, in particular, linear low-density grades, have been spearheading the rise in film demand for flexible consumer and industrial packaging largely because of the enhanced mechanical properties that allow down-gauging.

The AMI report also cites the emerging economy of Mexico as important in driving the plastics industry forward. Growth there has exceeded the regional average. “A growing middle class with more expendable income, a large export economy that competes at a global level and legislative reforms geared toward developing the Mexican economy have been instrumental in the nation’s polymer demand increase above 3% a year over the five years leading up to 2017,” said the AMI report.

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