CONTENTS

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July 2016

IBISWorld Industry Risk Rating Report

Plastics Wholesaling in the US

Plastics Wholesaling in the US

July 2016
Risk Overview ...............................................................................................................................................2
Industry Definition & Activities ...................................................................................................................... 2
Industry Risk Score....................................................................................................................................... 2
Risk Rating Analysis ..................................................................................................................................... 2

Structural Risk ..............................................................................................................................................5

Barriers to Entry ............................................................................................................................................ 5
Basis of Competition..................................................................................................................................... 6
Domestic and International Markets ............................................................................................................. 6
Industry Assistance....................................................................................................................................... 7
Life Cycle ...................................................................................................................................................... 7
Industry Volatility........................................................................................................................................... 8

Growth Risk ...................................................................................................................................................9

Growth Analysis ............................................................................................................................................ 9

Sensitivity Risk .......................................................................................................................................... 10

Demand from plastics and rubber products manufacturing....................................................................... 10
Price of plastic materials and resin............................................................................................................. 11
Value of construction .................................................................................................................................. 13
Consumer spending.................................................................................................................................... 16

IBISWorld Industry Risk Scoring Methodology ................................................................................ 19

What is Industry Risk .................................................................................................................................. 19
Methodology ............................................................................................................................................... 19
Risk Levels.................................................................................................................................................. 19

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Plastics Wholesaling in the US

July 2016

Risk Overview
Industry Definition & Activities
This industry wholesales plastics materials and resins, and unsupported plastic film, sheet, sheeting, rod,
tube and other basic forms and shapes. Products sold w ithin the Plastics Wholesaling industry are sold to
industrial manufacturers. Manufacturers use plastic products to manufacture durable goods.
The primary activities of this industry are:
Plastic foam wholesaling
Plastic materials wholesaling
Plastic resins wholesaling
Plasticizers wholesaling
Plastics basic shapes wholesaling

Industry Risk Score

Forecast Period: December 31, 2017
To calculate the overall risk score, IBISWorld assesses the risks pertaining to industry structure (structural
risk), expected future performance (growth risk) and economic forces (sensitivity risk). Risk scores are
based on a scale of 1 to 9, where 1 represents the lowest risk and 9 the highest. The three types of risk are
scored separately, then weighted and combined to derive the overall risk score.
Risk component

Structural risk
Growth risk
Sensitivity risk
Overall risk

Weight

Score

25%
25%
50%

4.77
5.35
2.60
3.83

Risk Rating Analysis

Risk Score Trend Analysis
Overall risk in the Plastics Wholesaling industry is forecast to be LOW over 2017. The primary positive
factors affecting this industry are consumer spending and value of construction. Overall risk will be slightly
lower than the previous year, a result of favorable movements in price of plastic materials and resin as well
as value of construction. However, their impact will be partially offset by a projected rise in growth risk.
Risk Score Context
In 2017, the average risk score for all US industries is expected to be in the MEDIUM-LOW band.
Furthermore, the risk score for the Wholesale sector, which includes this industry, is also at a MEDIUMLOW level. Therefore, the level of risk in the Plastics Wholesaling industry will be lower than that of the US
economy and the Wholesale sector.
Structural Risk Analysis

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Plastics Wholesaling in the US

July 2016

Structural risk will be MEDIUM over the outlook period. Operators are exposed to moderate revenue
volatility, which requires prudent management of cash flows and planning in the face of uncertain demand.
Businesses that fail to account for these challenges are at a risk for sudden losses or diminished margins.
Additionally, firms face a medium amount of competition, which exacerbates risk by placing downward
pressure on prices and profit margins. However a positive for operators within the industry is presence of
some barriers to entry, which protect against higher competition in the long run by reducing the ability of
new operators to enter the marketplace.
Growth Risk Analysis
Growth risk is expected to be MEDIUM-HIGH over the outlook period. IBISWorld forecasts that annual
industry revenue will grow 1.4% to $51.7 billion. In comparison, revenue expanded 2.5% per year between
2014 and 2016.
Sensitivity Risk Analysis
Sensitivity risk is forecast to be VERY LOW over the outlook period, down from LOW in 2016. The two
factors with the most significant impacts on the industry are demand from plastics and rubber products
manufacturing and price of plastic materials and resin. When there is a rise in demand from plastics and
rubber products manufacturing, risk will fall; whereas a rise in price of plastic materials and resin will
cause industry risk to increase.
Demand from plastics and rubber products manufacturing: A wide variety of manufacturing industries,
including the automotive, electronics and packaging industries, use plastics in the manufacturing process.
Therefore, increased demand for finished plastic products boosts demand for the distribution of plastic
materials. This factor's contribution to risk is expected to decrease in the coming year.
Price of plastic materials and resin: Plastic materials and resin are petroleum products, made from crude
oil, a global commodity the price of which is constantly fluctuating. As a result, the price of plastic
materials and resin, the industry's primary inputs, fluctuates as well. When wholesalers buy these inputs
for higher prices, they generally pass the cost increases on to customers, though at times they absorb some
of the extra cost themselves. Higher prices therefore lead to higher revenue; however, sustained price
increases can turn customers away from plastic products in the long term. The price of plastic materials
and resin is expected to decrease in 2015. This factor's contribution to risk is expected to decrease in the
coming year.
Value of construction: Downstream industries in the construction sector propel activity for plastics
wholesalers. When the construction sector is thriving, more purchases of plastic products are made;
consequently, plastic product manufacturers buy more plastic materials from plastics wholesalers. This
factor's contribution to risk is expected to decrease in the coming year.
Consumer spending: Consumers purchase many goods made of plastic or packaged in plastic. When
consumer spending declines, demand for plastic materials and products falls. Since plastic materials and
products are distributed by this industry, demand for plastic-wholesaling services also declines when
consumer spending shrinks. Consumer spending is expected to increase in 2015. This factor's contribution
to risk is expected to increase in the coming year.

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Plastics Wholesaling in the US

July 2016

42461 - Plastics Wholesaling in the US

9

Risk Rating

1
2008

Industry Risk

2009

2010

2011

2012

Division Risk: Wholesale Trade in the US

2013

2014

2015

Economy Risk: Entire US Economy

2016

2017

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Plastics Wholesaling in the US

July 2016

Structural Risk
An industry's structural score measures the impact of the fundamental characteristics common to all
industries. These seven components are scored separately, then weighted and combined to derive the
structural risk score.
Structure component

Barriers to Entry
Competition
Exports
Imports
Assistance
Life Cycle Stage
Revenue Volatility
Structural Risk

Level

Trend

Weight

Score

Medium
Medium
Low
Low
Low
Mature
Medium

Steady

13%
20%
7%
7%
13%
20%
20%

5.00
5.00
1.00
2.00
7.00
5.00
5.00
4.77

Steady
Steady
Steady

Barriers to Entry
Barriers to entry in this industry are medium
Barriers to entry in this industry are steady
The Plastics Wholesaling industry has a moderate level of barriers to entry. Although there are no direct
regulatory barriers to entry, there are aspects of the Plastics Wholesaling industry that may make it
difficult for new entrants. While established wholesalers have relatively low levels of capital expenditure,
new ventures are required to invest large amounts of money in equipment, facilities, and initial
merchandise, which can preclude less-capitalized firms from entering the industry. New entrants may also
struggle to gain market share and customers in such a mature industry. Many potential clients already
have well-established relationships with other wholesalers, and it would take considerable amounts of time
and effort to lure them away.
Moving forward, as manufacturers continue the trend of wholesale bypass by selling their goods directly to
the end user, firms that do only wholesaling are expected to be forced out of business since they cannot
compete on price with original product manufacturers. This trend will negatively affect new entrants to the
industry as well. Nevertheless, the highly fragmented nature of this industry means that there is still the
opportunity for firms with a technical knowledge of various plastics to enter the industry and survive (or
even thrive) by catering to niche downstream markets or targeted geographical areas.

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Plastics Wholesaling in the US

July 2016

Basis of Competition
Competition in this industry is medium
Competition in this industry is steady
Competition among plastic wholesalers is primarily based on price, customer service and brand loyalty.
Wholesalers need to focus on the first two areas, price and customer service, in order to attract repeat
customers and generate brand loyalty. Large industry firms are generally at a competitive advantage in
terms of price as these firms' extensive economies of scale allow them to offer the most price-competitive
products. However, small and large firms are on more even ground in the area of customer service. While
large firms employ vast amounts of sales support and customer service personnel and generally offer
online inventory catalogs, they may be unable to match the intimate, customized customer service offered
by smaller companies that only sell to a few downstream businesses. Additionally, the relative ease of
creating a website coupled with a dramatic increase in the number of services conducted online over the
past five years has allowed smaller firms in the industry to provide their customers with many of the same
internet-based value-added services that their larger competitors offer.
Products for certain downstream markets, such as construction and manufacturing, require parts on a justin-time basis, with wholesalers who have the ability to provide that level of service gaining a competitive
advantage. To ensure they meet appropriate delivery times, successful firms invest in computerized
inventory management, supply chain management and demand forecasting software. This automation is
particularly important for firms that own large fleets of transportation vehicles and operate a national
distribution network.

Domestic and International Markets

Exports
Exports in this industry are low
Exports in this industry are steady
Imports
Imports in this industry are low
Imports in this industry are steady
The Plastics Wholesaling industry does not engage in international trade; IBISWorld accounts for import
and export activity at the manufacturing level. Despite this factor, the Plastics Wholesaling industry is
affected by international trade. Domestic manufacturers that source raw plastic materials from this
industry as well as abroad are importing fewer products each year as shipping costs go up and emerging
nations begin to charge more for their labor. Fewer imports lead firms to source more plastic raw material
from the United States, benefitting the industry.

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Plastics Wholesaling in the US

July 2016

Industry Assistance
The level of Industry Assistance is low
The trend of Industry Assistance is steady
There are no specific tariffs for this industry
While no direct assistance is given to wholesalers, there are several tariffs placed on plastic products that
provide indirect assistance to the Plastics Wholesaling industry. In fact, a number of firms that operate in
this industry are also plastics manufacturers, to whom import tariffs are especially helpful. Because
plastics are manufactured from refined petroleum, they can take a number of different forms including
polyvinyl chloride (PVC) pipes, polyethylene terephthalate (PET) beverage bottle and polystyrene foam.
Nevertheless, imported plastic products or resins in primary form are generally subject to ad valorem
tariffs of 3.0% to 6.5% as established by the Harmonized Tariff Schedule of the United States.
Assistance in this industry is also provided by trade associations operating throughout the United States.
Some of the more prominent associations include the Society of the Plastics Industry and the American
Plastics Council. The Society of the Plastics Industry (SPI) was established in 1937 and is the largest trade
association representing plastic product manufacturers in the United States. SPI represents 900,000
workers and almost $400 billion in annual shipments across the entire plastics industry supply chain,
including processors, machinery and equipment manufacturers, and raw materials suppliers. Assistance
provided by SPI to members includes the provision of workplace development programs, compliance
assistance, trade shows, industry information and statistics, safety and environmental programs and sales
leads. Similarly, the American Plastics Council is an organization that provides information on
environmental issues through partnerships and strategic alliances. This association represents the industry
at the federal, state and local level.

Life Cycle
The life cycle stage is mature
Life Cycle Reasons
The industry's products are necessary inputs for a variety of manufacturing processes
Industry value added is increasing at a similar rate to GDP
The industry is consolidating
The Plastics Wholesaling industry is in the mature phase of its life cycle. IBISWorld expects industry value
added, a measure of the industry's contribution to the economy, to increase at an annualized rate of 2.8%
over the 10 years to 2020. In comparison, national GDP is expected to grow at an annualized rate of 2.2%
over the same period. Rising manufacturing input costs and the trend of wholesale bypass have yet to push
the industry into decline. Industry products, while commoditized, are a necessary input in a variety of
manufacturing processes and consumers use plastic products for a variety of everyday needs.
The existence of clearly defined product groups and user industries along w ith the fairly stable nature of
industry products also demonstrate that the industry is in its mature phase. No significant new products
have been introduced to boost the industry to a growth stage. The industry's key buying markets within the
manufacturing and construction sectors are still slowly recovering from the impact of the recession and
will demand a moderate, relatively steady amount of the industry's products over the 10 years to 2020.
Due to rising costs of goods and increased operating expenses, operators are consolidating. However,
increases in projected revenue growth will still attract new entries to the industry. In the 10 years to 2020,
the number of new enterprises is expected to increase at an annualized rate of 1.3% to 2,548 companies.

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Plastics Wholesaling in the US

July 2016

Industry Volatility
The level of volatility is medium
The industry exhibits a moderate level of revenue volatility. The level of activity in manufacturing
industries typically encourages additional spending and investment on products in this industry. Industry
revenue is also susceptible to changes in environmental legislation that regulate the handling, storage,
transportation, treatment or disposal of materials. Industry output is influenced by inventory management
in customer industries: the higher levels of stock held by customers, the lower level of initial product
demand.
As the economy continues its recovery, demand from various downstream markets will slowly recover as
well. While fluctuations in downstream demand and manufacturing input prices may occur in any given
year, these fluctuations are expected to be moderate and to have a corresponding impact on industry
revenue. Consequently, IBISWorld expects revenue volatility to decrease over the next five years.

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Plastics Wholesaling in the US

July 2016

Growth Risk
The growth risk score evaluates forecasted industry revenue growth against past performance as well as
expected growth for all other industries. A high industry growth rate is associated with lower risk for
operators in that industry.
Growth component

2014-2016 Annualized growth

2016-2017 Forecast Growth
Growth risk

Revenue

Weight

Score

2.5%
1.4%

25%
75%

4.86
5.51
5.35

Growth Analysis
As a key intermediary in the supply chain, the Plastics Wholesaling industry is integral to the US
manufacturing sector. Plastics wholesalers distribute resin and plastic materials to plastic product
manufacturers. They also distribute finished plastic products to other downstream industries, including
car manufacturers and construction industries. Because wholesalers buy and resell products without
changing them, fluctuations in industry revenue depend largely on the market price of plastic. When
plastic prices are higher, industry revenue generally increases, and vice versa when plastic prices decrease.
Industry revenue is expected to fall 0.1% in 2015 as the price of plastic and resin is anticipated to fall
temporarily.
In the five years to 2015, industry revenue is expected to increase at an annualized rate of 1.8% to $48.5
billion. Increased activity in the construction sector and automobile manufacturing industry is expected to
increase demand for plastic products, and thus sales to those segments. Additionally, increased overall
economic activity among developed countries and the recovery of oil prices from their precipitous drop at
the end of 2014 are expected to put upward pressure on the price of plastic and resin. Over the five years to
2015, the price of plastic and resin is expected to increase at an annualized rate of 2.1%. Combined, these
forces are expected to sustain revenue and profit growth over this period.
Looking ahead, the industry is projected to experience higher demand from plastic product manufacturers
and the construction sector. Strong demand and slowly increasing plastic prices will cause revenue to
grow; revenue is expected to increase an annualized rate of 2.2% to $54.2 billion in the five years to 2020.
Although, strong plastic prices will boost revenue, they will also keep profit margins from widening; profit
margins are expected to stay flat at 4.7% of revenue. As a result, some wholesalers have started making
deals with large manufacturers to be the sole provider of plastic materials. Companies are expected to
make more of these deals in the next five years, resulting in greater competition among larger wholesalers.
Moreover, projected increases in revenue will encourage new businesses to enter the industry. In the five
years to 2020, IBISWorld anticipates the number of enterprises to increase at an annualized rate of 1.8% to
2,548 companies.

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Plastics Wholesaling in the US

July 2016

10

Sensitivity Risk
IBISWorld has identified and weighted the most significant external factors affecting industry
performance. These factors are scored separately, then weighted and combined to derive the sensitivity
risk score.
Sensitivity component

Demand from plastics and rubber products manufacturing

Price of plastic materials and resin
Value of construction
Consumer spending
Sensitivity risk

Weight

Score

40%
25%
20%
15%

3.19
2.61
2.23
1.51
2.60

Demand from plastics and rubber products manufacturing

A wide variety of manufacturing industries, including the automotive, electronics and packaging
industries, use plastics in the manufacturing process. Therefore, increased demand for finished plastic
products boosts demand for the distribution of plastic materials. Revenue for plastics and rubber products
manufacturing is expected to decrease in 2015, representing a potential threat to the industry.
Demand from plastics and rubber products manufacturing
10

% Change

-5

-10

-15

-20
2006

2008

2010

2012

2014

2016

2018

2020

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Plastics Wholesaling in the US

Year

$ million

2003

35,961.2

2004

71,231.8

2005

% Change

July 2016

Year

$ million

% Change

2013

232,819.4

1.94

98.08

2014

238,984.8

2.65

239,955.5

236.87

2015

239,053.6

0.03

2006

245,715.9

2.4

2016

242,476.8

1.43

2007

239,514.8

-2.52

2017

248,012.2

2.28

2008
2009

227,313.0
188,415.2

-5.09
-17.11

2018
2019

253,509.4
257,920.2

2.22
1.74

2010

205,395.5

9.01

2020

262,117.5

1.63

2011

217,333.8

5.81

2021

266,314.1

1.6

2012

228,397.9

5.09

2022

263,304.8

-1.13

11

Price of plastic materials and resin

Estimated Value in 2016: 213.8 Index value
2011-2016 Compound Growth: -1.4%
Forecasted Value for 2021: 206.0 Index value
2016-2021 Compound Growth: -0.7%
This report uses the producer price index for plastic materials and resin. This makes it possible to average
the growth in price for various types, including organic, synthetic and processed varieties. The index has a
base year of 1982. Data is sourced from the Bureau of Labor Statistics and is presented as the equallyweighted average of monthly figures.
Current Performance
Crude oil is the primary raw material used in plastic production. Therefore, changes in the value of oil are
reflected immediately in the price of plastic materials and resin as producers pass through these
fluctuations to buyers. These buyers come from all sectors including packagers of consumer products,
makers of medical instruments, car parts and rigs, as well as operators in the construction industry. Thus,
the level of activity in these sectors of domestic and international economies greatly influences demand
and, therefore, the price of plastic materials and resin. Furthermore, because this driver tracks the price of
US-made plastic materials, it is susceptible to fluctuations in exchange rates. A weak dollar makes
American goods more competitive relative to imports, supporting demand and driving up the price.
In the years up to the recession, strong economic growth in the United States and overseas, mixed with a
weakening dollar, provided a potent engine of growth. The impact of these domestic trends was
exacerbated by rampant growth in emerging countries including China, India and Brazil, which placed
upward pressure on oil prices that resonated within plastics. As a result of these factors, the producer price
index for plastic materials and resins jumped from an average of 130.7 in 2002 to 215.0 in 2008.
However, by late 2008, the entire world was starting to feel the impact of the financial crisis and the
housing market meltdown. The primary reasons behind the price surge continued to move in lockstep, but
now in the opposite direction. The US manufacturing and housing sectors plunged, while growth in

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12

emerging economies slowed just as investors fled to the safety of US Treasury Bills, causing a sharp
appreciation in the US dollar. The index reversed, recording an average of 190.8 in 2009, 11.3% lower than
the previous year.
The ground lost in 2009 was nevertheless recovered in 2010, and the price index then surpassed previous
highs in 2011. While the US economy was slowly shaking off the impact of the financial downturn, other
countries (particularly in East Asia) continued to rebound rapidly, making up for soft domestic demand.
Stoking prices even further was the continued weakness of the US dollar due to the loose fiscal and
monetary policies enacted to combat the economic downturn. A weaker US dollar means that domestic
producers have to spend a greater amount to purchase oil, the price of which rose considerably during the
two years to 2012. Y et, a remarkable but persistent drop in the world price of oil that began in late 2014
caused the price of plastic material and resin to fall 11.3% over 2015. The world price of crude oil is
anticipated to decline even further in 2016, which is expected to drag down the domestic price of plastic
material and resin.
Outlook
The price of plastic materials and resin will remain closely linked to movements in the value of oil. This
also means that plastic prices will retain a high level of volatility, which is typical of oil and other
commodities. This has particularly been the case in recent months, with oil prices yet to rebound from the
rapid decline experienced in late 2014. A rising trade-weighted index is also expected to increase the level
of import penetration in the market for plastic materials and resin, which is anticipated to drag price down
over the next five years. Overall, the price of plastic material and resin and expected to decline at an
annualized 0.7% over the next five years.
Price of plastic materials and resin
300

250

Index

200

150

100

50

0
1980

1985

1990

1995

2000

2005

2010

2015

2020

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Plastics Wholesaling in the US

Year

Index

1980

98.5250

1981

102.0333

1982

Abs. Change

July 2016

Year

Index

Abs. Change

2002

130.7333

-3.43

3.51

2003

146.0667

15.34

99.9917

-2.04

2004

163.1417

17.07

1983

102.8417

2.85

2005

193.0333

29.89

1984

108.8917

6.05

2006

198.3917

5.36

1985
1986

107.5250
104.4583

-1.37
-3.06

2007
2008

195.9083
215.0167

-2.48
19.11

1987

110.2667

5.81

2009

190.8083

-24.21

1988

132.4167

22.15

2010

210.1167

19.31

1989

133.4417

1.02

2011

229.9083

19.79

1990

124.1000

-9.34

2012

235.2000

5.29

1991

120.0000

-4.1

2013

245.2667

10.07

1992
1993

116.3667
117.1167

-3.63
0.75

2014
2015

257.0250
228.0083

11.75
-29.01

1994

122.4167

5.3

2016

213.7500

-14.26

1995

143.5417

21.12

2017

194.5575

-19.19

1996

133.0917

-10.45

2018

198.1760

3.62

1997

137.3250

4.23

2019

201.8122

3.63

1998

125.2833

-12.04

2020

204.1247

2.31

1999

125.8500

0.57

2021

205.9658

1.85

2000
2001

141.5917
134.1583

15.74
-7.43

2022

208.8213

2.85

13

Value of construction
Estimated Value in 2016: $1,194.2 billion
2011-2016 Compound Growth: 8.7%
Forecast Value for 2021: $1,543.1 billion
2016-2021 Compound Growth: 5.3%
The value of construction provides estimates of the total dollar value of private and public construction
work done in the United States. The data includes construction work done on building and non-building
(e.g. roads, bridges, etc.) new structures or improvements to existing structures. Data estimates include the
cost of labor and materials, cost of architectural and engineering work, overhead costs, interest and taxes
paid during construction and contractors profit. Maintenance and repairs to existing structures, land
acquisition and the cost and installation of machinery are not included. Data is not seasonally adjusted and
is sourced from the US Census Bureau.
Current Performance

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The national economy is finally entering the recovery stage from its longest and deepest recession since
World War II. The effects of the Great Recession were felt by all segments of the economy, but the
construction sector was disproportionally impacted by the collapse of financial markets and the
subsequent decrease in demand for new housing and nonresidential building space. The weakness in
construction expenditure in 2007 reflected the steep correction for housing over the course of the year.
This correction grew more pronounced from 2006 with the turmoil in the financial markets caused by the
subprime mortgage meltdown. Total construction value continued to decrease through 2011 due to falling
state and local spending on construction that reflected budget woes.
In 2011, the value of total construction spending was below 2010; however, the value of private residential
construction during the year was slightly greater than the value in 2010. This represented a sharp contrast
to the annual declines in 2008 through 2010. Healthcare construction led the growth in total construction
in 2012. Healthcare is expected to benefit considerably from the continual changes in demographics (i.e.
mainly an aging population), healthcare reform and improving credit markets. Other areas of
improvement are expected in lodging and office construction, but these changes will be more minimal.
Over the year, some key areas in public and private sector construction can be attributed to growth in the
value of total construction spending. For example, robust demand for construction from nonresidential
lodging and the amusement and recreation sector offset poor demand from the power sector. Moreover,
while demand for construction from the healthcare sector plummeted in 2015, this was offset by strong
demand for construction from the commercial sector. In 2016, the value of construction is expected to rise
8.7%.
Outlook
The value of construction is forecast to improve at a faster rate than the overall economy (as measured by
GDP) during the five years to 2021. The value of construction is correlated to the health of the economy,
but the direction of the causation arrow is not clear. An improving economy will foster growth in
construction, as developers gain easier access to credit, corporations have the cash to fund new buildings
and retailers have the demand to construct additional stores. The economy also benefits from escalating
construction spending, which leads to job growth. Regardless, the value of construction is forecast to grow
at an annualized 5.3% over the five years to 2021 alongside the improving economic environment.

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Plastics Wholesaling in the US

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Value of construction
2,000,000.00

$ million

1,500,000.00

1,000,000.00

500,000.00

0.00
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Year

$ million

% Change

Year

$ million

%
Change

1990

476,778.000

1991
1992

432,592.000
463,661.000

-9.27
7.18

2007

1,147,953.000

-1.15

2008

1,077,351.000

-6.15

1993

491,033.000

5.9

2009

906,544.000

-15.85

1994

539,193.000

9.81

2010

809,254.000

-10.73

1995

557,818.000

3.45

1996

615,900.000

10.41

2011
2012

788,331.000
850,456.000

-2.59
7.88

1997

653,429.000

6.09

2013

906,351.000

6.57

1998

705,685.000

2014

993,408.000

9.61

1999
2000

766,062.000
828,768.000

8.56
8.19

2015

1,098,499.000

10.58

2016

1,194,245.401

8.72

2001

852,553.000

2.87

2017

1,256,652.049

5.23

2002

847,877.000

-0.55

2003

891,498.000

5.14

2018
2019

1,304,743.404
1,378,561.750

3.83
5.66

2004

991,357.000

11.2

2020

1,470,085.019

6.64

2005

1,116,811.000

12.65

2021

1,543,075.291

4.97

2006

1,161,282.000

3.98

2022

1,624,691.991

5.29

15

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16

Consumer spending
Estimated Value in 2016: $11.53 trillion
2011-2016 Compound Growth: 2.36%
Forecasted Value for 2021: $13.01 trillion
2016-2021 Compound Growth: 2.44%
Consumer spending (more formally aggregate consumption) measures the total amount spent by
Americans on services and new goods and net purchases of used goods, both domestically and abroad. The
data for this report is sourced from the Bureau of Economic Analysis and presented in chained 2009
dollars.
Current Performance
The financial meltdown and subsequent recession caused a nearly 30-year streak of consecutive growth in
aggregate consumption to snap. Since 1980, the combination of job growth, lower savings and easier access
to credit allowed American consumers to spend a greater amount than they had the previous year, even
during times of economic hardship such as the bursting of the dot com bubble. However, the rapid
deterioration of housing and financial markets led to a simultaneous tightening of credit and soaring
unemployment, crippling incomes and preventing consumers from maintaining their spending habits. As a
result, aggregate consumption slid by 0.3% in 2008 and fell further in 2009, by 1.6% to $9.85 trillion.
Not all spending categories were impacted in the same way amidst the contraction. Expenditures on goods,
particularly durable ones, declined more rapidly than spending on services or non-durable goods. The
hardest hit categories were motor vehicles and parts, gasoline and transportation services. This is not
surprising given that a significant portion of travel is to or from work, with widespread job losses
diminishing demand for these categories. Additionally, durable goods by definition are usable over longer
periods of time, and thus upgrading or replacing older products such as furniture can be put on hold
during times of economic hardship. Meanwhile, expenditures on services generally held their ground or
recorded meek growth. However, there were declines even among service providers, with food and
accommodation categories slipping in both 2008 and 2009.
Consumer spending grew in 2010 and 2011, regaining the ground it lost during 2008 and 2009. The
growth was partially driven by pent up demand for durables, which were scaled back during the downturn,
being unleashed, leading to particularly robust growth within this category. Continued growth in 2016
(estimated at 3.0%) has been aided by the falling unemployment rate, which will improve per capita
disposable income, and a sharp decline in gasoline prices.
Outlook
Barring the recent recession, aggregate consumption growth has fluctuated within a narrow band,
displaying slow and steady growth over the last two decades. With wage growth anticipated to pick up
alongside recent employment gains, IBISWorld expects that the long term historical growth rate will
reassert itself. More specifically, the creation of additional jobs will translate into a greater number of
dollars in consumer wallets, enabling them to ramp up purchases. The ability to spend is expected to be
further strengthened by easier access to credit, particularly for those who rejoin the work force, though
lending standards will remain tighter than their pre-recession levels. Finally, higher employment and a
brighter economic outlook are expected to boost consumer sentiment, which is forecast to make consumers
willing to utilize their regained spending power.

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Data Volatility
According to IBISWorld calculations, aggregate consumption displays a low level of volatility. This is
largely because spending habits are deeply ingrained and fluctuations, particularly cutbacks, are marginal
rather than drastic. Changes in aggregate consumption typically reflect changes in income or access to
credit, rather than actual changes in underlying habits. Consequently, unemployment and lending
activities play an important role in influencing the direction of aggregate consumption.
Consumer spending
6

% Change

-2
1981

1986

1991

1996

2001

2006

2011

2016

2021

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Plastics Wholesaling in the US

Year

$ billion

1981

4,050.8000

1982

4,108.4000

1983

% Change

July 2016

Year

$ billion

% Change

2002

8,598.8000

2.58

1.42

2003

8,867.6000

3.13

4,342.6000

5.7

2004

9,208.2000

3.84

1984

4,571.6000

5.27

2005

9,531.8000

3.51

1985

4,811.9000

5.26

2006

9,821.7000

3.04

1986
1987

5,014.0000
5,183.6000

4.2
3.38

2007
2008

10,041.6000
10,007.2000

2.24
-0.34

1988

5,400.5000

4.18

2009

9,847.0000

-1.6

1989

5,558.1000

2.92

2010

10,036.3000

1.92

1990

5,672.6000

2.06

2011

10,263.5000

2.26

1991

5,685.6000

0.23

2012

10,413.2000

1.46

1992

5,896.5000

3.71

2013

10,590.4000

1.7

1993
1994

6,101.4000
6,338.0000

3.47
3.88

2014
2015

10,875.7000
11,210.5000

2.69
3.08

1995

6,527.6000

2.99

2016

11,531.7089

2.87

1996

6,755.6000

3.49

2017

11,838.9165

2.66

1997

7,009.9000

3.76

2018

12,153.2554

2.66

1998

7,384.7000

5.35

2019

12,400.7330

2.04

1999

7,775.9000

5.3

2020

12,692.2918

2.35

2000

8,170.7000

5.08

2021

13,009.2881

2.5

2001

8,382.6000

2.59

2022

13,344.1434

2.57

18

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19

IBISWorld Industry Risk Scoring Methodology

What is Industry Risk
IBISWorld Industry Risk evaluates the inherent risks associated with hundreds of different industries in
the United States. Industry Risk is assumed to be "the difficulty or otherwise of the operating
environment". This approach is new in that it analyses non-financial information surrounding each
industry.
The Industry Risk score is forward looking, and the score looks at expected Industry Risk over the next 1218 months. The methodology is based on industry classifications and is designed to identify and quantify
risks inherent in specific industries both now and into the 12 month forecast.
Industry-based information would, for example, enable the examination of a loan book (portfolio) w ith
regards to risk, which would enable a more sophisticated assessment of risk spread and pricing to risk.
Alternatively, individual exposures can be better evaluated using an assessment of structure and key
drivers of change in the industry of the exposure.

Methodology
To calculate the overall risk score, IBISWorld assesses the risks pertaining to industry structure (structural
risk), expected performance (growth risk) and economic forces (sensitivity risk). Risk scores are on a scale
of 1 to 9, where 1 represents the lowest risk and 9 the highest. The three types of risk are scored separately,
then weighted and combined to derive the overall risk score.
Structure Score: An industry's structural score measures the impact of the fundamental characteristics
common to all industries. These seven components are scored separately, then weighted and combined to
derive the structural risk score. This component contributes 25% of the overall score.
Growth Score: The growth risk score evaluates forecasted industry revenue growth against past
performance as well as expected growth for all other industries. A high industry growth rate is associated
with lower risk for operators in that industry. This component contributes 25% of the overall score.
Sensitivity Score: IBISWorld has identified and weighted the most significant external factors affecting
industry performance. These factors are scored separately, then weighted and combined to derive the
sensitivity risk score. Examples include input costs, number of housing starts, commodity prices, etc. This
component contributes 50% of the overall score.

Risk Levels
Risk Score

Level of Risk

1-3

Very Low

>3 - 4.1

Low

>4.1 - 4.7

Medium - Low

>4.7 - 5.3

Medium

>5.3 - 5.9

Medium - High

>5.9 - 7

High

>7 - 9

Very High

Plastics Wholesaling in the US

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20

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