The Plastics Industry Association (PLASTICS) Chief Economist, Dr. Perc Pineda, has released a new economic analysis examining how plastics manufacturing continues to drive value added and GDP growth in the U.S. economy.
“Each year, the Plastics Industry Association releases its Size and Impact Report, which, as the title implies, quantifies the size of the plastics industry and its economic impact,” writes Dr. Pineda. “In 2024, the report shows that the inflation-adjusted value added of plastics manufacturing increased by 2.0% from 1997 to 2024, while that of overall U.S. manufacturing decreased by 0.1% over the same period. This suggests that plastics manufacturing—the eighth-largest manufacturing sector in the U.S. economy based on the dollar value of shipments—continues to make a positive contribution to U.S. GDP.”
The economic concept of value added refers to the amount by which the value of an article increases at each stage of its production, excluding initial costs. The Bureau of Economic Analysis (BEA) defines value added as an industry’s gross output minus its intermediate inputs, representing its contribution to the nation’s Gross Domestic Product (GDP).
Each year, the Plastics Industry Association releases its Size and Impact Report, which, as the title implies, quantifies the size of the plastics industry and its economic impact.* One of the metrics in the report is the industry’s value added compared to that of the overall manufacturing sector. In 2024, the report shows that the inflation-adjusted value added of plastics manufacturing increased by 2.0% from 1997 to 2024, while that of overall U.S. manufacturing decreased by 0.1% over the same period. This suggests that plastics manufacturing—the eighth-largest manufacturing sector in the U.S. economy based on the dollar value of shipments—continues to make a positive contribution to U.S. GDP. Moreover, it indicates the material’s broad acceptance as the material of choice across many sectors of the economy.
Quarterly data confirm that plastics manufacturing value added exceeds that of paper and glass (which fall under nonmetallic mineral products) manufacturing, as shown in the chart below. It can be observed that during the pandemic, manufacturing activity picked up across the three sectors. As economic activity normalized, manufacturing in these sectors pulled back accordingly.
In the second quarter of this year, it was estimated that the inflation-adjusted value added of plastics manufacturing (based on plastics and rubber products manufacturing data) was $68.1 billion. This was 26% higher than that of paper products and 40% higher than that of nonmetallic mineral products, which include glass. Without adjusting for inflation, the value added of plastics manufacturing edged up from $96.7 billion in the first quarter to $100.1 billion in the second quarter, a 3.4% quarterly increase.
Given the wide range of plastics applications across the manufacturing sector, it is not surprising that the value added of plastics manufacturing exceeds that of other materials with similar applications, such as paper and glass in packaging. Notably, plastics have a myriad of applications beyond packaging. In short, plastics manufacturing continues to outpace comparable materials in value added, highlighting its significant and growing contribution to the U.S. manufacturing sector and the macroeconomy.
