Packaging and Electronics
Strong Food/Beverage Industry Means More Packaging
Real disposable income was at an all-time high of $12,464 billion (seasonally adjusted at an annual rate) in February, having grown 2.7 percent over one year earlier and virtually identical to the rate of growth in the previous three months. It was the fourth month in a row that income grew less than the historic average of 3.1 percent, however, and all income data since October was revised lower. The annual rate of change fell to 3.2 percent in the month, which was the fourth straight that the annual rate of growth decelerated. While this was still above the historical average, it was the slowest rate of annual growth since April 2015.
Consumer spending on food and beverage started 2016 with very strong growth, increasing more than 1.3 percent month-over-month in both January and February compared with 2015. As a result, the annual rate of change in February grew at the fastest rate since December 2014.
Other than in 2003, food and beverage production in March grew at its fastest rate in nearly a decade. The rate of growth has accelerated quite sharply since the middle of last year. One would expect that increased consumer spending would lead to more production, and this, in turn, should increase the demand for plastics packaging.