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Numbers in Perspective

The uncertainty stemming from tariffs and trade policy — underscored by a 50.9% surge in imports — trimmed 0.3% from U.S. output in the first quarter. This disruption may help explain the softening sentiment among plastics processors. Although the GBI Plastics Processing Index held steady at the neutral threshold of 50.0 in March, it edged down to 45.3 in April. This modest decline points to a cooling in plastics conversion activity, likely reflecting increased caution amid shifting trade dynamics and broader economic uncertainty.

Perc Pineda, Ph.D., Chief Economist, Plastics Industry Association.
Source: PLASTICS

In line with the weaker outlook — evident in the drop in the future ����ý expectations component of the GBI Processing Index from 63.1 in March to 53.0 in April — employment in plastics and rubber products manufacturing fell by 2,600 in April. While the overall economy added 177,000 nonfarm payrolls, job losses in this sector pushed its unemployment rate up from 4.3% in March to 5.3% in April.

The rise in imports may reflect a logical response by ����ýes looking to get ahead of potential tariff hikes. But the more important question is: Where did those imports end up? Inventory accumulation typically boosts GDP in the short term. If the surge in imports — perhaps driven by expectations of future demand — was anticipatory, it could be a positive signal. However, if inventories are building due to weak sales, it may suggest slowing demand.

If history is any guide, trade tensions between partners tend to be resolved — eventually. In the meantime, processors would do well to focus on what they can control and keep sight of the broader reality: The demand for plastics isn’t going away anytime soon.