Plastic packaging sector cautiously optimistic

Portrait photo of Dr Laura Müller, Economics Officer at IK Industrievereinigung Kunststoffverpackungen e.V. (German Association for Plastic Packaging)

More companies are anticipating rising sales volumes for the fourth quarter, whilst fewer firms expect a fall in revenue.
 
According to the economic survey conducted by the IK Industrievereinigung Kunststoffverpackungen amongst 112 member companies, the assessment of the economic situation has improved, but remains subdued. According to the IK, 55 per cent rate the economic situation in Germany as satisfactory, 42 per cent as poor and three per cent as good. In the previous quarter, 59 per cent had still rated the situation as poor. The results point to a slight stabilisation. Sales expectations are also better, according to the survey. According to the data, around 20 per cent expect sales volumes to rise, compared with 12 per cent in the previous quarter. At the same time, the proportion of companies with declining expectations has fallen from 32 per cent to 25 per cent. Profit pressure is easing, but remains high: around 40 per cent of companies still expect profits to fall, down from 48 per cent in the previous quarter. Just under 12 per cent anticipate an improvement. Around 69 per cent also expect stable availability of raw materials. According to the companies’ assessment, the main factor weighing on profitability is the persistently high prices of raw materials. Employment is also reported to be largely stable. According to the survey, 70 per cent plan no change to their workforce, nine per cent plan to increase staff numbers and 21 per cent plan to reduce them. This means that, for the most part, the sector is retaining its skilled workforce. However, the IK emphasises that there is still no sign of a turnaround. Persistently high price and cost pressures is said to continue to weigh on profitability.
 
Dr Laura Müller, Economic Affairs Officer at the IK, explains: “The crisis surrounding the Strait of Hormuz has put the plastics packaging industry through an extraordinary test this year. Raw material markets, supply chains and costs came under considerable pressure in the short term. The fact that the sector has managed to navigate this phase whilst simultaneously meeting the high implementation requirements of the EU Packaging Regulation (PPWR), which has been in force since August, demonstrates the sector’s strong economic resilience.”
 
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