Plastics and rubber - Industry Overview

US Industrial Outlook,  Annual, 1994  by Raimundo M. Prat

• E-mail
• Print
• Link

Imports continued to outpace exports at a nearly 2:1 ratio in 1993. But a steady growth of exports, starting in 1989, has slowly cut into this negative net trade position since then.

The foreign trade sector of the industry is stable, as evidenced by several consecutive years when the ratio of combined exports and imports to overall industry shipments remained relatively constant. Trade turnover remains at about 30 percent of total industry shipments. Canada is now the United States' largest trading partner, absorbing 40 percent of total U.S. exports, while supplying about 30 percent of imports in 1992.

ENVIRONMENTAL PROFILE

Environmental concerns over the proper disposal of scrap tires raise continuing challenges to the industry. Large scale recycling of scrap tires is not a reality at present. Although the implementation of options such as landfill, export of ground or usable tires, and burning (tire-derived fuel) have been helpful, they have not made significant inroads in the nation's vast supply of scrap tires.

Outlook for 1994

Industry shipments are projected to grow by no more than 1 percent in 1994. Higher than average growth is expected for the high-performance, truck, and light truck tires. Little or no growth is projected for original equipment passenger tires installed on new cars.

Long-Term Prospects

A pronounced shift is forecast to non-price factors such as convenience and safety. Retreading and recycling will continue to attract research funding as public concerns grow over the glut of scrap tires. State and local funding of programs to provide incentives for finding acceptable disposal methods is likely to proliferate in coming years.

FABRICATED RUBBER PRODUCTS

This miscellaneous category (SIC 3069) includes a wide variety of industrial rubber products including rubberized fabrics, vulcanized rubber clothing, rubber-based medical and health-related supplies, custom-made rubber products, as well as rubber products made from recycled rubber. As with tires and plastic products, the production process for fabricated rubber products is standardized, consisting of four basic operations: design, compounding of the material, mixing, and molding.

Customer service has come to the fore as a key factor in the industry. With a large number of players, firms have taken recourse to strengthening product design, delivery and service capabilities.

[TABULAR DATA OMITTED]

INTERNATIONAL COMPETITIVENESS

Trading patterns reflect the U.S. industry's position as a moderately competitive producer; the United States is both a major exporter to industrialized nations and an importer of lower-cost product from industrializing countries. Imports continue to make inroads in the domestic market and stand at a nearly 2:1 ratio to exports. Two-way trade relative to total industry shipments remains stable, at about one-fifth of total industry shipments.

Outlook for 1994

Industry shipments are forecast to grow by 3 percent in 1994, largely reflecting expected increases in manufacturing use of fabricated rubber products, as well as higher consumer spending. Higher than average growth is expected for automobile and health-related protective items.