The Great Recession of 2007-2009 set many records in the U.S. economy at large and within many specific industries. The unusual drop-off in demand that we experienced in the composites business makes for an ugly line graph but is not dissimilar from what most other industries experienced during the same time frame (graph1). We are fortunate that many composites segments, such as automotive, industrial and oil field applications, have begun to recover fairly quickly. Other segments like construction, marine, infrastructure and wind energy appear to have stabilized but will be slower to recover the ground lost. Here I’ll focus on some leading composites segments and key economic indicators relevant to demand of our products.
2010 was a year of partial recovery for most manufacturers, suppliers and distributors serving the five billion pound U.S. composites industry. Coming on the heels of an unprecedented 35 percent collapse of industry demand in 2009, this year provided welcome relief to most sectors of the composites community. However, 2010 did not return the industry to its previous high point from 2006, but it showed a remarkable V-shaped rebound in overall demand. With many inventories in the supply pipeline now replenished, 2011 shipments will level off to a single digit rate of growth and should provide additional volume to fabricators serving automotive, energy, and diverse industrial markets.
There is no industry database or reporting agency able to measure precisely the number of pounds of finished composites shipped in the U.S. each year because of the huge diversity of composite products made and scores of industries served. Some demand is also met by imported finished products. So we attempt to gauge the historical volume of composites by monitoring key raw materials used by all composites fabricators, like the more common thermosetting or thermoplastic resins and reinforcements, usually fiberglass. The predominant resin system used in the industry is unsaturated polyester, and its manufacturers collectively reported a 30 percent decline in shipments in 2009 followed by a 16 percent recovery in demand experienced in the first two quarters of 2010. Domestic shipments by U.S. fiberglass producers and fiberglass imports fell 35 percent in 2009 and rebounded an estimated 40 percent in 2010. Fiberglass shipments are a more broad-based proxy for composites demand since they encompass fabricators working with epoxy and phenolic resins, as well as a series of thermoplastic resins like nylon and polypropylene. Further ratio analysis enables us to estimate the pounds of finished composites.