The U.S. Bureau of Labor Statistics released in mid-2023 data related to employment in manufacturing of plastic, synthetic filaments and rubber products that showed that the number of workers in those activities fell in recent years, including so far in 2023, while other key indicators suggest both productivity losses and need for safety improvement.

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As recently as March 2023 as many as 748,600 people were employed in plastic and rubber and synthetic filament plants but that number fell to 746,100 by April. Then the number fell again to 744,900 in May and then it dropped further to 742,900 in June, according to information for U.S. manufacturing of resin, synthetic rubber, and artificial fibers and filaments as published by the Federal Reserve Bank of St. Louis. 

Plastics, rubber plants cut payrolls

An index used to measure employment in resin, rubber and filaments called The Manufacturing Index, that used 2012 as base year, stood as high as at 172 in 1999 but then fell to under 100 just a decade later by 2009. Just more than another decade later it remains nearly flat at 104, according to the data published on July 7, 2023.

Part of the reasons behind the employment decline could be that producers are now building plants that can be run by less people compared with two decades ago.

“In December 1981, when the Polisur plant started up in Bahia Blanca, Argentina, it was the largest polyethylene plant in the world, with a nameplate capacity of 120,000 tonnes per year. Now no one builds a plant with less than 400,000 to 450,000 tonnes per year capacity,” said Jorge Bühler-Vidal, with Polyolefins Consulting and based in New Jersey.

Shell plans to complete in 2023 the startup of a polyethylene complex in Pennsylvania with 1.6 million tonnes per year of resin capacity. Chevron Phillips Chemical and QatarEnergy plant to start later in the decade a polyethylene complex in Texas with two million tonnes per year of capacity.

There are also ongoing automation advances that in addition to increasing the scale of plants have contributed to reducing the need to hire and train workers, Bühler-Vidal added.

“You can see a similar trend among plastics processors. Larger machinery, more automation, with same or less numbers of people operating them,” Bühler-Vidal added.

Declining productivity

The output-per-worker ratio for the plastics, rubber and filaments segment has been declining in the past decade, after improvement earlier.

The output per worker for manufacturing resin, synthetic rubber, and artificial synthetic fibers and filaments in the U.S., as published on July 7, and using 2012 as a base year, was only 54.5 in 1992 but improved to 81 in 2002 and to 100 in 2012, according to the U.S. Bureau of Labor Statistics,  However, the output-per-worker ratio steadily declined throughout the past decade to 77.5 in 2022.

The unit labor costs index, another way to measure changes, also points to a decline in U.S. resins, rubbers and artificial fibers productivity.

The unit labor cost index rose from 117.8 in 2019 to 140.8 in 2022 indicating gains. But then between 2021 and 2022 fell to 91.7 from 95.1, a 3.6% decline

Other data shows indicates productivity declines occurred as total labor hours increased.

The Labor Index, a tool that measures total labor hours, rose from 107 in 2020 to 111 in 2021 and then to nearly 116 in 2022. This represented annual increases of about 4% annually for both 2021 and 2022.

The number of fatalities involving workers in resin, rubber and artificial fiber manufacturing more than doubled in 2021 compared with two years earlier. 

Workplace fatalities in plastics and rubber products reached 10 in 2019, rising to 16 by 2020, and then to as many as 25 in 2021.

Decreased resin production in 2023 vs. 2022

U.S. production of major plastic resins totaled 7.7 billion pounds during May 2023, a 0.5% increase compared with the prior month and a 6.2% decrease from the same month in the previous year, according to statistics  published on June 30 by the American Chemistry Council. 

Year-to-date production was 39.5 billion pounds, a 0.9% decrease compared with 2022, it added.

Sales and captive (internal) use of major plastic resins totaled 7.8 billion pounds during May 2023, a 2% decrease from the same month a year earlier.  Year-to-date sales and captive use were 38.4 billion pounds, a 2.5% decrease compared with the same period in 2022, it said.

Overall, the total unemployment rate across all industries in the U.S. has ranged from 3.4% to 3.7% since March 2022, the U.S. Bureau of Labor Statistics reported in early July. It has improved significantly from 6.1% in March 2021, when actions to prevent the spread of the Covid-19 disease such as travel or restaurant dining and other restrictions were enforced.

Officials at Dow, the Midland, Michigan-based organization that is one of the world´s biggest petrochemical companies, have announced employee reductions in 2023 citing challenges to profitability with most projected to take place in the second quarter 2023, officials have said.

By Renzo Pipoli