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Less turnover for plastics processors

German plastics processors lost 4.6 per cent of their turnover in the first half of 2023 - the packaging industry 5.9 per cent.

Compared to the previous year, plastics processors lost 4.6 per cent of their turnover in the first half of 2023. The packaging sector recorded a loss of 5.9 per cent. Companies see little improvement for the second half of the year.

In the consumer-related areas The still high inflation and higher interest rates are having an impact on the reduced buying mood. Discussions about the heating law and some outstanding wage increases have led to a reluctance to buy in private households. In addition, during the pandemic years, there were some early investments in the home and garden that are now lacking.

Vehicle construction is bucking the trend and, according to the VDA, expects growth of 15 per cent compared to the previous year. In other areas, however, there are clear signs of a weakening economy in the second half of the year. 

This weakness in demand is now being met by a Oversupply of plastics produced. This depresses the material price of the original goods as well as that of the products made from them. These are also not good conditions for plastics recycling companies operating in the circular economy. They have to compete with high electricity costs and corresponding quality requirements. With poorer input streams (lower plastic waste volumes) and Prices of the original goods, which are lower than the recyclates, economically possible.

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Recyclates at risk?

A possible further decline in industrial production in the second half of the year and the continued reluctance to spend could then have a negative impact on the Jeopardising the business model of recyclers. Firstly, because this does not allow the prices of the original material to recover, and secondly, because it will not be possible to produce high-quality recyclates economically with lower-quality plastic waste.

This pessimistic assumption is supported by the fact that none of the plastics processing sectors expects an improvement in the coming half-year. In macroeconomic terms, a recession is now not unlikely. Key early indicators such as the construction and chemical industries have been reporting declining sales and order figures for months. The mechanical engineering sector has also been sending out clear warning signals recently.

Effects on economic growth in Germany

The investment climate in Germany is poor due to the current framework conditions and economic growth in the world is not strong enough to stimulate the export-orientated economy in Germany. In fact, the opposite can now be observed. The always expensive Location loses competitiveness due to the renewed rise in energy prices, higher labour costs and interest rates, The new market environment will put the major competitors, above all China, in a better position. The Share of German imports to the EU down from 17.7 per cent to 15.5 per cent, whereas, according to an IW analysis, imports from China rose sharply from 2.5 to 13 per cent in the same period from 2000 to 2022.

The debate about a „bridging electricity price“ for industry has been going on for weeks, but without a political decision providing planning security for companies. However, companies are not waiting, they are making decisions now, and those who can expand in their foreign plants, as documented by the IW for 2022 with a € 132 billion direct investment surplus abroad.

Medium-sized plastics processing companies often lose out here. Not least because of these conditions, the willingness to sell a family business has increased significantly and is already leading to a shift from companies rooted in Germany to global players that do not have these German roots.

„The frustration is high,“ reports Michael Weigelt, Managing Director of TecPart - Association of Technical Plastic Products, on the mood among plastics processors and recyclers. The impression is that there is a lot of talk in Berlin, but no action. „The country needs to be made competitive again, and the potential to improve from its current last place in the IMF ranking is extremely promising.“

Source: TecPart e.V.

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