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MARKET UPDATE | NEWS


Gauging the business impact of the Covid-19 pandemic


The Covid-19 pandemic has hit the global economy hard. A new survey by Compounding World publisher AMI measures the impact on the plastics industry and expectations for recovery


The global plastics industry has certainly not escaped the impact of the Covid-19 pandemic with more than 60% of businesses experiencing a reduction in activity of 10% or more over the first half of the year, according to the findings of a global survey of plastics industry business sentiment carried out by Compounding World publisher AMI in the second half of June. However, the survey also reveals a high level of optimism among plastics industry players — more than 60% of respondents expect their business to have returned to per-Covid-19 levels by the end of 2021.


www.compoundingworld.com


Unsurprisingly, the AMI survey confirms that the impact of the Covid-19 pandemic on the plastics industry was both sudden and significant. Most respondents experienced a negative impact on business activity during the first half of the year with a significant minority seeing their activity decline by 20% or more. It was also clear from responses that the impact of Covid-19 was felt at different points in time around the world — China in the first quarter, the rest of Asia together with Europe and North America around March, and South America and the Middle East and


Africa through Q2. Aside from the timing, however, the business impact appears very similar in each region. For the majority of the


participating businesses – some 70% - the impact on their business was negative in H1, with 40% seeing a reduction in activity of 20% or more. The data shows that resin producers and masterbatch makers experienced some of the biggest immediate hits, most likely as a result of processors taking the opportunity to de-stock and use up inven- tory (which may correspond- ingly mean they see a faster pick-up). Companies active in automotive and transport


were also hit hard, with 91% reporting a negative impact and more than 60% seeing a decline of 20% or more on H1 2019.


However, 14% of


respondents reported no significant impact on their business, and 14% identified better than expected levels of activity. Businesses involved in flexible food packaging markets were the most bullish, with 30% of those experiencing an increase in business activity in the first half of the year compared to an industry average of 10%. In terms of the challenges the pandemic presented to plastics businesses around


August 2020 | COMPOUNDING WORLD 17


IMAGE: SHUTTERSTOCK


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