By May 20, 2015 Read More →

American plastics industry: Big growth thanks to shale gas

American plastics industry ‘re-shoring’ jobs to the United States

The American plastics industry is experiencing a renaissance and expecting significant growth over the next decade, all due to abundant supplies of natural gas from shale production.

American plastics industry

Announced and Expected Plastics Industry Investment
Motivated by Shale Gas Advantage ($ billions).

According to the American Chemistry Council, plentiful and affordable natural gas and natural gas liquids from shale formations will help boost U.S. jobs related to plastics manufacturing by 462,000 over the next decade—more than 20 per cent—reaching more than 2.7 million, according to a new report.

The Rising Competitive Advantage of U.S. Plastics,” published by economists at the Council, found that the shale gas production surge has reversed the fortunes of the plastics industry, shifting the competitive advantage to the United States, where producers mostly use raw materials derived from natural gas. In other regions, plastics makers mainly use an oil-based feedstock.

“A decade ago, the United States was among the highest-cost plastics producers,” said Steve Russell, the Council’s vice president of plastics. “Today, America is one of the most attractive places in the world to invest in plastics manufacturing. Even after recent declines in oil prices, our nation has a decisive edge.”

American plastics industry

Steve Russell, the American Chemistry Council’s vice president of plastics.

The Council’s report found that the American plastics industry could experience investments of nearly $47 billion in new capacity to produce plastics materials and products, which are expected to create hundreds of thousands of permanent jobs up and down the supply chain over the next decade. In addition, the analysis projects nearly 97,000 temporary jobs will be created during the peak of the construction phase.

The increased supply will be consumed by plastics-intensive industries, such as automotive, building and construction, and packaging, which use modern-day plastics in part to achieve sustainability goals.

In addition, net exports (or U.S. trade surplus) of plastics are expected to triple between 2014 and 2030, growing from $6.5 billion to $21.5 billion, according to a recent report by Nexant Consulting.

“This substantial investment in new capacity is creating more high-paying jobs in the United States in this high-tech industry,” said Russell.

“Plastics materials makers pay workers on average nearly $85,000, which is more than 73 per cent higher than the average wage for workers across U.S. industries.”

In addition to contributing to economic growth, the American plastics industry renaissance will supply strong, lightweight auto parts, insulation and packaging that will help industries in the United States and around the world to meet energy, waste, and greenhouse gas reduction targets, according to Russell.

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