Weekly

Slight recovery expected in the plastic packaging industry

19 July 2024

The economic situation in the plastics packaging industry in Germany has improved slightly in the third quarter of 2024, despite continuing challenges, according to the latest economic survey conducted by the IK Industrievereinigung Kunststoffverpackungen e.V., in which 102 member companies took part.

The ongoing weakness in demand continues to weigh on sales expectations: While 30 per cent of companies anticipate declines in sales, only 14 per cent expect increases. Nevertheless, a positive trend is discernible: 44 per cent of respondents rate their economic situation as satisfactory - an increase of 5 percentage points. At the same time, the proportion of companies with a negative assessment fell from 60 to 55 per cent.

The situation on the labour market is remarkable: 80 percent of companies expect employment levels to remain the same. The export situation shows a slight improvement: 13 per cent of companies expect exports to increase, while only 24 per cent (previously 29 per cent) expect foreign demand to fall. The earnings situation remains tense, but has improved slightly, as the proportion of companies expecting a decline in earnings has fallen by 8 percentage points to 49 per cent.

Raw material availability predominantly good

A recent IK survey on the effects of changing European production capacities shows that the availability of raw materials is currently rated as ‘good’ by 59 per cent of the member companies surveyed and even as ‘very good’ by 17 per cent. However, member companies fear future bottlenecks, particularly for the plastics PP (47 per cent), HDPE (33 per cent) and LDPE (30 per cent). Looking ahead to Q3, 83 per cent of companies rate the availability of raw materials as unchanged. Only 9 per cent of companies expect the availability of raw materials to deteriorate - a decrease of 15 percentage points.

corresponds to a decrease of 15 percentage points.

The current positive situation regarding the availability of raw materials can be explained, among other things, by the continuing weakness in demand. In addition, given the limited capacities of cracker plants in Europe, many IK member companies have reorganised or adapted their raw material procurement strategies. For example, 62 per cent of companies are already relying on a diversified supplier base, particularly with a focus on other European countries. In addition, 50 per cent of the member companies surveyed are investing in recycling and the increased use of recyclates. ‘Our survey shows that the

industry is finding ways to adapt despite the economic policy challenges,’ explains Dr Martin Engelmann, Managing Director of the IK. ‘Companies have taken measures to minimise risks and thus promote security of supply.’

Source: Print.de