Plastics and rubber - Industry Overview

US Industrial Outlook, Annual, 1993 by Raimundo Prat

Concentration within the industry remains low; in fact, it has declined slightly in recent years. Four of the largest companies were responsible for 6 percent of total shipments, and the largest eight for only 10 percent. As of 1987, more than 12,000 establishments were identified as businesses whose primary output could be included within the SIC 308 category.

More than 50 percent of total output of plastic materials (SIC 2821) goes to captive processors, and 40 percent reaches independents. Roughly one-tenth of total resin production goes to suppliers and equipment manufacturers. More than one-half of plastic material was consumed by two end-markets in 1990--packaging, and building and construction (Table 2).

Table 2: Plastic Materials and Applications,1990
in percent)
End Use                                 Consumption
Packaging
 27.7
Building and construction                 23.5
Consumer and Institutional products       10.2
Electrical/electronic                      5.8
Furniture and furnishings                  7.4
Transportation                             5.8
Industrial/machinery                       2.1
Other (compounders, resellers)            17.5
Total                                    100.0
SOURCE: "Facts & Figures of the U.S. Plastics Industry", Society of the Plastics
Industry.

INTERNATIONAL COMPETITIVENESS

Foreign trade has remained stable in recent years. During the 1980's imports of all nine four-digit SIC categories within SIC 308 grew six-fold, resulting in a consistently negative net trade balance since 1985. Two categories, SIC 3083 (Laminated Plastics Shapes) and 3089 (Miscellaneous Plastics Products) continue to account for the bulk of exports. Most of the latter go to Canada and Mexico.

Outlook for 1993

Given the wide use of products within this SIC code, growth in 1993 will depend directly on the state of the overall economy; constant-dollar shipments are forecast to grow by 3 percent. Certain product groups--especially automotive parts and new auto industry products--are expected to grow between two and three times faster than the industry average. Activity in housing-related areas (plastic paneling, tubing, etc.) will probably lag unless housing starts accelerate.

Long-Term Prospects

Expansion through the mid-1990's will probably occur in tandem with several changes. Further rationalization of design, manufacture, and distribution is foreseen as intensive automation of the production cycle through CAD/CAM continues. At the same time, strengthening customized service functions--including individualized product design and consulting--will lead to shorter delivery times, plus improved quality control. Intensive research on recyclable materials and technologies will be more prevalent than often costlier and less efficient retrofiting setups.

RUBBER MATERIALS

This SIC, 2822, joins together highly-elastic materials derived from petroleum feedstock, and also materials used to make a wide variety of highly-resistant products. Often referred to as elastomers, synthetic rubber (SR) is normally used by itself or compounded with natural rubber, other thermoplastic materials, and additives. Typical end uses are electrical and thermal insulation; shock, friction, noise and abrasion control; waterproofing and sealing; and load bearing.