Plastic packaging industry between recession and resilience

Bad Homburg, 14 February 2024

2023 was a difficult year for the German plastic packaging industry: the GVM industry statistics for plastic packaging show an overall decline in production of minus 10 percent to 3.8 million tonnes and a drop in turnover of minus 7.7 percent to 16.8 billion euros compared to the previous year.

The situation is even more dramatic for flexible packaging and films. Here, the decline in production last year was 12.4 per cent and 14.1 per cent respectively. The production of drums, canisters and buckets also fell by more than 12 per cent. By contrast, the production of bottles fell by a comparatively mild 3.7 per cent in 2023.

The main reason for the negative developments is the continuing weak demand in the most important customer industries:

The decline in the construction industry continued in 2023 and the chemical industry, excluding pharmaceuticals, reported an 11 per cent drop in production. Demand for consumer goods fell overall in 2023 - but spending on food and beverages in particular.

Energy costs, bureaucracy and discussion about plastic tax are a burden

DrLorenaFricke Initiative ERDE Recycling Agricultural Plastics "Our members reported an increase in imports of plastic packaging to Germany. The reason for this is the significant deterioration in the competitiveness of German plastic packaging manufacturers, primarily due to increased energy costs. Added to this is the ongoing substitution by paper and paper composites," explains Dr Lorena Fricke, IK Economics Officer.

A large number of regulatory measures and reporting obligations, which will increase considerably overall, as well as higher transport costs are also placing a burden on companies. The German government's announcement of a plastic tax is also contributing to market uncertainty.

Export prospects as a glimmer of hope

The outlook for 2024 as a whole is mixed. However, the results of a recent IK economic survey provide a certain glimmer of hope. "It looks like the low point has been reached and partially overcome in terms of sales development and exports. Nevertheless, the outlook for 2024 as a whole remains gloomy - especially in terms of earnings," says Lorena Fricke. The chemical and construction industries are likely to remain critical sales sectors due to weak demand. The consumer goods sector is also not expected to see an end to the reluctance to buy any time soon.

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Source: IK