The U.S. plastics industry was designated by the U.S. government an essential industry last year as the economy went to into lockdowns to contain the spread of COVID-19. Plastics provide solutions in healthcare; the ongoing pandemic underscores plastics’ role in protecting healthcare workers and the general population. Vaccination against COVID-19 is possible and affordable because of plastic packaging. At the same time, plastic syringes are an undeniably cost-effective packaging material for distribution of a global public good: the COVID-19 vaccine.
By Perc Pineda, Ph.D.
Chief Economist
The U.S. plastics industry was designated by the U.S. government an essential industry last year as the economy went to into lockdowns to contain the spread of COVID-19. Plastics provide solutions in healthcare; the ongoing pandemic underscores plastics’ role in protecting healthcare workers and the general population. Vaccination against COVID-19 is possible and affordable because of plastic packaging. At the same time, plastic syringes are an undeniably cost-effective packaging material for distribution of a global public good: the COVID-19 vaccine.
The pandemic has negatively affected the economy’s output since the COVID-19 recession started in February 2020. While the COVID-19 recession ended in April 2020, the U.S. continues to emerge from a pandemic that has displaced millions of workers, exposed supply chain weaknesses, and created materials shortages. Along with the obvious challenges imposed by the pandemic on manufacturing, weather-related headwinds this year led to plastic materials and resin shortages.
Where is plastics production since COVID-19 recession ended? Despite weather and supply chain disruptions, U.S. plastics production improved. It has expanded since the COVID-19 recession. Plastic products manufacturing in October 2021 increased 20.2% from April 2020 – the end of the COVID-19 recession. On a quarterly basis, plastics production expanded 4.2% in Q3 2021 and 5.9% from a year earlier, based on estimates from the Board of Governors of the Federal Reserve System.
From the looks of it, plastics production will also expand in Q4 2021. While production edged down 0.6% from September, it increased 4.0% from October last year. Plastics and rubber products shipments in September increased 0.6% from August and 6.2% from a year earlier. Retail trade and food services sales, which use plastics products and packaging, were off to a good start in the final quarter of the year. It increased 1.7% in October from September and 16.3% from October last year. With the largest shopping season of the year on the way, expect a pick-up in sales. PLASTICS forecasts a 12.3% increase in retail sales (excluding food services) compared to last year. This should lead to an increase in plastics shipments in Q4 2021 and an increase in production and finished goods inventories for Q1 2022. PLASTICS is forecasting a 3.3% increase in plastics production this year compared to 2020.
