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FOR IMMEDIATE RELEASE

U.S. PLASTICS INDUSTRY RECOVERS FROM 2000 RECESSSION

High Energy, Materials Cost Threaten Future Growth

WASHINGTON, D.C. (January 27, 2006) – The U.S. plastics industry is recovering from the 2000 recession, according to two new reports released today by the Society of the Plastics Industry, Inc. (SPI), although high energy and materials costs are threatening future growth.

SPI's 2004 Global Business Trends and Size and Impact of the Plastics Industry on the U.S. Economy reports uncover some bright spots, including a 6.7 percent growth in demand in 2004, an increase in the overall value of shipments and an increase in exports. The reports also find that American-produced goods still hold significant market share over imports, when measured on an industry-wide basis.

"There is hope for a complete recovery," said SPI president Bill Carteaux. "It is now up to our congressional leaders to put in place common-sense policies that strengthen our manufacturing sector."

The U.S. plastics industry continues to face challenges that foreign competitors do not – in particular, extremely high prices for natural gas, according to Karen Bland Toliver, SPI's senior director for trade. Natural gas is the primary raw material used to make resins, the main ingredient in plastics.

"High energy costs are pushing up the costs of materials by as much as 20 percent, and costs are rising so much faster than the value of shipments that companies have not been able to pass them on through price increases," Toliver noted. "Coupled with burdensome corporate tax rates and rising health care costs, the situation is forcing jobs and business overseas."

SPI reports that the industry has lost 200,000 jobs since 2000. A third of the losses occurred between 2002 and 2004, when natural gas prices began to climb to record highs.

"Right now, natural gas prices remain at a crisis level and will continue to jeopardize jobs in the plastics industry and the manufacturing sector as a whole unless something is done soon," Carteaux noted.

"As Congress enters a new term and an election year, we will be seeking commitments from congressional leaders and the White House to do everything in their power to bring down natural gas prices by opening up exploration in the Western United States and Outer Continental Shelf," Carteaux said.

SPI's 2004 Global Business Trends and Size and Impact of the Plastics Industry on the U.S. Economy reports are available for purchase at www.plasticsdatasource.org.

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Founded in 1937, The Society of the Plastics Industry, Inc., is the trade association representing one of the largest manufacturing industries in the United States. SPI's members represent the entire plastics industry supply chain, including processors, machinery and equipment manufacturers and raw materials suppliers. The U.S. plastics industry employs 1.3 million workers and provides nearly $345 billion in annual shipments.

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