Lagging Behind in the Productivity Race

Exactly two years ago, I discussed here some surprising statistics in Contributions of Plastics to the U.S. Economy 1997, a report from the Society of the Plastics Industry in Washington, D.C. Those figures showed that labor productivity in plastics processing was significantly lower than the average for all U.S. manufacturing. Now SPI has come out with SPI Plastics Industry Economic Report 2000, which shows an even wider productivity gap.

The table shows that the average value of shipments per employee for plastics processors in 1999 was 33% below that for all U.S. manufacturers. The difference was 28% in 1996. Subtracting the value of raw-material inputs, the value added per employee is now 28% lower for plastics than for all manufacturing (vs. 25% before).

Plastics productivity grew 6% since 1996, and value added grew 11%. But overall manufacturing grew even faster (14-15%). Keep in mind that the overall average includes many industries—automotive, appliances, electronics, etc.—whose productivity has been greatly enhanced by plastics’ contribution to parts consolidation and faster assembly. So plastics processors may be raising their customers’ productivity faster than their own.

Still, plastics appear to be falling behind the competition—glass, metal, wood, paper, and concrete. On the website of the Bureau of Labor Statistics (www.bls.gov), I compared 15 industry sectors that compete with plastics (metal cans, glass containers, die casting, woodworking, paper products, etc.). The latest data were for 1996 and ’97, when nine to 11 of those competing sectors grew faster in output per employee than did plastics processing. If that trend continues, it can’t bode well for plastics.