Trends and forecast Healthcare plastics usage in the US tops 30.4 billion dollars

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Plastics Industry Association

AMPCO METAL Deutschland GbmH

Renishaw plc

DIPROFIL Diamantprodukter AB

Plastics are vital in healthcare. Pandemic-driven production spikes are stabilizing in the US, with a projected 0.6 percent growth for 2024. Steady healthcare spending suggests a potential 2 percent growth in medical equipment production next year.

Plastics has been a trusted material for many years, relied upon by pharmaceutical companies, medical equipment manufacturers, laboratories and research facilities, and healthcare professionals. According to the Plastics Industry Association’s annual Size and Impact Report, an estimated 8.2 percent of plastics and plastic products, amounting to about 30.4 billion dollars, were used in healthcare services in 2022. It is not surprising that in April 2021, the Industrial Production Index for medical equipment and supplies rose 25.5 percent year-over-year as the world battled the Covid-19 pandemic. This increase continued to 27.6 percent in May 2021, before gradually returning to its long-run growth rate.

U.S. domestic production of medical equipment and supplies is complemented by international trade. When accounting for U.S. trade of these goods with other countries, the trade balance — the difference between exports and imports — decreased last year to 10.9 billion dollars, following trade deficits of 13.3 billion dollars in 2022. At the height of the Covid-19 pandemic, the trade deficit widened from 10.2 billion dollars in 2020 to 17.8 billion dollars in 2021. This was driven by growth in imports from 44.9 billion dollars in 2020 to 57.1 billion dollars in 2021.

In December 2023, production of medical equipment and supplies rose by 1.3 percent. This year began with a 0.8 percent decline in medical equipment and supplies production in January from the previous month. There was a brief recovery with a 1.7 percent increase in February, but production declined again by 0.8 percent in March, 0.4 percent in April, 2.1 percent in May, and 1.1 percent in June. Overall, production decreased by 1.8 percent in the first quarter and 2.1 percent in the second quarter.

According to the latest Plastics Quarterly Forecast, it is projected that medical equipment and supplies manufacturing will increase by 0.6 percent this year. Plastics companies serving the healthcare sector may have noticed a slowdown in business activity, raising concerns about whether the recent declines signify a trend.

Judging from macroeconomic data, Personal Consumption Expenditures (PCE) on healthcare remained stable in the long run. Spending on healthcare, a metric of demand, has ranged between 16.0 percent and 17.0 percent of PCE from 2007 to 2023. In 2023, the PCE on healthcare was 2.5 trillion dollars. If this trend continues this year and next, it can be expected that the production of medical equipment and supplies will align with the long-run trend and could grow by 2.0 percent next year.

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