"China Plastics Machine" quoted foreign media reports, although the overall performance of the US economy in the second quarter was strong, GDP growth rate was much higher than the long-term trend, but the Federal Reserve Board data showed that the total output of US plastic products in June was June last year. A 1% decline, a four-month decline, the total production in the second quarter was lower than the same period last year. Plastic economist Bill Wood predicts that the total output of plastic products in the United States this year may be the first negative growth since 2009.
Regardless of the standard, the US economy performed strongly in the second quarter. Total demand, corporate profits and employment levels were strong. The level of confidence remained high by survey data and stock price levels. Both inflation and interest rates Very low, the real GDP growth rate is much higher than the long-term trend.
However, the Fed data showed that the plastics industry production index was 111.2 in June. This indicates that the total output of plastic products fell for the fourth consecutive month, which was 1% lower in June this year than in June last year, which made the total amount in the second quarter. It is lower than the same period of last year. Moreover, as shown in the figure, this downward trend seems to be getting steeper in the near future.
The capacity utilization chart is even more surprising. In the second half of last year and the first quarter of this year, this ratio has remained stable. The reason for the rising production level and flat utilization is due to the investment in new machines, which makes the industry more productive.
Bill Wood said that when demand rises, this is good news for the industry because it makes the processing machine more profitable, but when demand slows, it will drive down capacity utilization, which is what happened this year. According to the current The data and the situation experienced in the second half of last year are expected to have negative growth rates in the third and fourth quarters of 2018. If this forecast is established, it will lead to a negative growth rate this year, which will be from 2009. The total output of plastic products in the United States has declined for the first time since the beginning of the year
Bill Wood said that in this case, the overall level of activity of the processing machine is still quite good, so this is more like a relatively short integration period, rather than a longer cyclical contraction period.
However, this divergence in macroeconomic and plastics industry trends is still difficult to reconcile. Total new orders for durable goods increased by 7% in the second quarter, and durable goods were good indicators for manufacturing (including plastics). Total retail sales increased by 6% in the second quarter. The total retail sales is a good indicator of the demand for various consumer goods (especially packaging).
The likely reason is that the activity level of some major plastics products in the end market is slowing down. For example, the market demand for new cars has dropped. So far, the total assembly of motor vehicles this year is about 2% lower than the first half of 2017. The growth in spending on residential construction projects is slowing. Compared with last year, the operating rate of new homes fell by 5% in June. Demand data on pipes and siding in recent months and home appliance production data (down 2% in the second quarter) This effect can be seen. Finally, the output of medical supplies in the United States has dropped by 4% so far. There is another factor worth mentioning, which may be one of the reasons for the current or future trend of differentiation: the cancellation and thoroughness of certain plastic products Prohibited.