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Productivity growth i n plastics

lower than a l l manufacturing

During 1972-81, output per hour increased

a t an annual rate of . 4 percent,

slowing to less than 1 percent fter 1976 ;

growth i n productivity has been

linked to improved technology

.LAMESD  YORK

Despite rapid output growth during 1972-81, productivity

in th e miscellaneous p l a s tics products industry increased a t

a somewhat slower rate than that fo r a l l manufacturing .

Productivity rose a t an average annual rate of 1 .4 percent

over th e period, while th e rate fo r a l l manufacturing was

1.8 percent .'

The rapid rise in output, a t an average annual

r ate of 5 .5 percent, was accompanied by an increase in

employee hours of 4 percent annually (See t a b le 1 .) In -

dustry productivity benefited from improvements i n resins

and faster processing equipment, and from the growing use

of microprocessor controls fo r production machinery .

Productivity trends fluctu ated during 1972-81, a s output

and hours responded to cyc li c al forces i n the economy . The

output of the p l a s t i c s industry encompasses a wide range of

products consumed in many ectors of th e economy . Con-

sequently, industry output tends to be strongly influenced

by trends i n the overa l l level of economic activity . A sharp

downturn in the economy l ed to sizable declines in the output

of p l a s ticsproducts : 9 .0 percent in 1974 and 12 .5 percent

in 1975 . Reductions in employee hours lagged initially, with

a decrease of only 1. percent in 1974 . With output de-

clining much more than hours in that ye ar, productivity

posted a 7 .9-percent decrease. In 1975, however, the rate

of decline i n hours accelerated to 12 . 6 percent, virtually

matching the decrease i n out pu t . With the changes n out pu t

and hours offsetting each other, productivity showed no

change fo r t h a t year .

With an improving economy, output increased very rap-

idly i n 1976 and 1977, rising by 18 . 9 percent and 24 . 4

percent . These gains outpaced the corre s p onding increases

i n hours of 14 . 5 and 1 1 . 4 percent and productivity conse-

quently rose by 3 . 8 and 1 1 . 7 percent . I n 1978, out pu t s t i l l

showed a sizable increas e of 10 . 7 percent bu t t h i s was more

nearly matched by the r i s e i n hours of 9 . 8 percent, resulting

i n a productivity gain of on ly 0. 8 percent . Employee hours

continued increasing i n 1979, by 4. 7 percent, despite a

decrease i n out pu t of 1.5 ercent, yielding a 6-percent drop

i n productivity . The economy experienced another downturn

i n 1980 and industry out pu t decreased by . l percent . Hours

were reduced even more, however, by 6. 1 percent, and

productivity managed to p o s t a gain of 0. 9 percent . The

economy began o imrrove after the sharp downturn i n the

f i r s t half of 1980 and h i s improvement continued i n t o 1981 .

Industry out pu t benefited, rising 6 . 9 percent, which out-

paced the 3 .9-percent increase i n hours and resulted i n a

productivity gain of 2. 9 percent .

Employment and p l a n t size

James D  York i s an economist i n the Division of Industry Productivity

Studies . Bureau of Labor Statistics

Employment i n the industry grew quite r api d ly during

1972-81, rising from 342,500 o 477,200, equivalent t o a n

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MONTHLYLABOR REVIEW September 1983 " Productivity Growth i n Plastics Products

average annual r a t e of increase of 4 . 0 percent . Employee

hours advanced a t th e same rate during t h i s period . By

comparison, th e rate of increase fo r a l l manufacturing em-

ployment was 0. 7 percent and th e rate fo r hours was 0. 6

percent .

Because th e output of plastics products serves such a wide

range of markets, trends i n th e industry's employment are

strongly influenced by cyclical swings i n th e overall econ-

omy . Despite rapid employment growth in plastics products

during th e 1972-81 period as a whole, there were declines

of 0. 1 percent i n 1974 and 12 . 7 percent in 1975-years i n

which th e economy was i n recession . Employment growth

was strong i n each of th e following years until 1980, th e

next recession year . I n that year, employment dropped 5. 5

percent . It recovered again i n 1981, however, rising by 3. 5

percent .

Most of th e establishments i n th e plastics industry are

small . Data available fo r 1977 indicate t h a t about 57 percent

of th e industry's establishments employ fewer than 20 em-

ployees . Most of th e employment, however, appears t o be

concentrated i n medium size establishments . Nearly halfof

t o t a l industry employment i n 1977 was i n establishments

with 50 to 249 employees . The establishments with fewer

than 20 employees accounted for only about 7. 5 percent of

industry employment, despite their large share of th e t o t a l

number of establishments . Very large establishments ar e

unusual, with l e s s than 0. 2 percent of a l l establishments

employing 1,000 or more workers i n 1977 . The average

number of employees per estabishment hardly changed dur-

in g 1972-77, declining from 45 employees i n 1972 t o 44

i n 1977 .

Data on th e k i l l composition of employment ar e available

fo r broad occupational groups i n th e miscellaneous plastics

productsindustry fo r 1980

.

These data indicate t h a t oper-atives are the major occupational group, constituting almost

56 percent of t o t a l industry employment, a s compared with

th e all-manufacturing average of just over 43 percent . This

job category includes such occupations a s assemblers and

machine operatives . Craft and related workers, which i n -

Table . Productivity and related indexes fo r miscellaneousplastics products, 1972-81

[ 1 9 7 7 = 1 0 0 )

YearOutput per

empoylee hourOutput Employee hours Employees

1972 . . . . . . 86 . 6 70 . 3 81 . 2 8 1 . 01973 . . . . . . 93 . 6 84 .9 90 . 7 9 1 . 0

1974 . . . . . 86 . 2 77 .3 89 .7 90 .91975 . . . . 86 . 2 67 .6 78 .4 79 .41976 . . . . . . . . 89 . 5 80 .4 89 .8 90 .2

1977 . . . . . . . . . 100 . 0 100 .0 100 .0 100 .01978 . . . . . . . . . 100 . 8 110 .7 109 .8 109 .61979 . . . . . . . . . 94 .8 109 .0 115 .0 115 . 51980 . . . . . . . . 95.7 103 .4 108 .0 109 .1

1981 . . . . . . . . 98.5 110 .5 112 . 2 112 . 9

Average annual r a t e s of change ( i n p e r c e n t )

1972-81 . . . . . 1 .4 5 .5 4 .0 4 .0

1976-81 . . . . . 0.8 4 . 9 4 . 1 4 . 2

clude machinists and tool-and-die-makers, were another

substantial category with almost 16 percent of t o t a l industry

employment, slightly less than th e all-manufacturing pro-

portion of just under 19 percent . Professional, technical,

and related workers constituted a somewhat lower propor-

tion of total employment than fo r a l l manufacturing-less

than 4 percent i n the plastics industry compared with over

9 percent for a l l manufacturing.

By contrast, th e sh are ofindustry employment composed of managers, o f f i c i a l s , and

proprietors was nearly the same a s that for a l l manufactur-

ing-about 6 ercent .

Major markets

An important reason fo r th e rapid growth of industry

output i s t h a t new arkets fo r plastics products have been

continually opening up . The development over time of new

and improved resins has been an important underlying factor

i n making t h i s possible . Plastics made from these improved

resins have been able t o meet more stringent performance

c r i t e r i a i n areas such as strength and heat resistance . With

these improved properties . plastics became suitable for the

manufacture of many products from which they had pre-

viously been excluded . As a r e s u l t , plastics began pene-

t r a t i n g product markets formerly dominated by other materials .

For example, plastic pipe has increasingly been substituted

fo r other types of pipe, such as copper and cast iron, as

building codes have been altered to acknowledge it s s u i t -

ability . The greater ease of installation of plastic pipe has

also meant that semiskilled workers could be employed t o

i n s t a l l i t . The benefits of plastics i n terms of such factors

as price, weight, and corrosion resistance have made them

a popular lternative t o competing materials i n many product

lines .

Building and construction . The building and construction

industry is an important market for plastics products . Plas-

t i c s products fo r t h i s market include such items a s panels,

doors, moldings, pipes, and insulation . By f a r , pipes ar e

th e most popular item : shipments nearly t r i p l e d during 1972-

77 . The advantages of plastic pipe (such as corrosion r e -

sistance) have helped i t to penetrate markets previously

dominated by other materials .

Agriculture . Agricultural uses are an important market for

plastic pipe . The need to increase food production during

th e 1970's served as a stimulus to th e demand for agricul-

tural pipe.

Plastic was promoted i n drainage and irrigationsystems. For example, corrugated polyethylene tubing be-

gan t o replace more expensive and cumbersome concrete

drainage t i l e . The us e of plastic pipe i n irrigation has ben-

efited from increased emphasis on agricultural efficiency z

One f th e biggest markets for plastics products i s i n film,

sheets, and sheetings . There are a number of types of these

items such a s cellulosic, polyethylene, polypropylene, poly-

styrene, and vinyl and vinyl copolymer . Useful fo r mulching

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applications, when spread upon an agricultural bed, film

controls moisture evaporation, prevents leaching of f e r t i l -

i z e r , accelerates growth , and increases yield .

The value of shipments of film and sheet proucts f or a l l

markets, including agriculture, increased considerably from

1972 t o 1977 . Shipments of polypropylene film and sheet

more than quadrupled during t h i s period . Cellulosic and

polystyrene also increased rapidly and polyethylene, oneof

th e biggest categories, more than doubled .Sheets are also

produced i n laminated form . Data fo r laminated sheets,

which are available i n combined form with data for lami-

nated rods and tubes, indicate t h a t shipments early doubled

during 1972-77.

Plastics products have found a growing number of ap-

plications i n agriculture besides sheeting and ipe . Injection

molded plastic parts on many types of agricultural equip-

ment ar e increasingly substituted for metal parts . Parts f or

seed d r i l l s , combines, planters, and tractors ar e more f r e -

quently being made of plastic . Some of the advantages of

plastics include cost and weight reduction and corrosion

resistance .

Packaging . Another mportant market fo r plastics has been

packaging applications . Blow molded milk containers, for

example, which ar e l a r g e , break-resistant, and l i g h t weight,

have achieved a h igh level of market penetration because

of their advantages . Plastic containers fo r other types of

food products have also grown n popularity . Shipments of

jars and tubs for food products nearly tripled during 1972-

77 . Advances i n blow molding technology around the be-

g i n n i n g of t h i s period helped push plastic drums into com-

petition with s t e e l , offering advantages i n reusability and

resistance t o denting and orrosion as well a s lighter weight .

Transportation equipment . Much of the output of the plas-

t i c s industry i s used i n th e manufacture of transportation

products . By far the largest portion of h i s output goes i n t o

the production of motor ehicles . I n 1977, nearly 80 percent

of plastics output, by value of sh ipments, going into the

transportation market, was used f or motor vehicles . The

remaining 20 percent went i n t o a i r c r a f t , space and missile,

and ther transportation equipment . About wo-thirds of he

portion going into motor vehicles was n the form of com-

ponents, h ousing, accessories, and parts . The e s t was i n

the form of foam products fo r such items a s seating and

dash . Substitution of plastics for metals ha s contributed t o

output growth . Light weight has helped make lastics prod-

ucts suitable f or a ultitude of applications i n the automotive

area .

Smaller markets . A maller bu t s t i l l sizable market f or plas-

t i c s i s th e electrical and electronic products market . One of

the biggest segments of h i s market-household and com-

mercial appliances-showed i t t l e change i n output during

1972-77 bu t items i n the computing and data processing

category grew rapidly . Furniture components and furnish-

ings also represent a f a i r l y sizable market f or industry out-

pu t .

Technological advances

The plastics industry produces an extremely wide a s -

sortment of products . The resins used as raw material can

be formed into a wide variety of sh apes using various pro-

cesses such as molding and xtrusion . ' The equipment used

i n these processes has been improving over time, aiding

industry productivity gains .

One of th e most widely used production processes i s

injection molding . This process involves heating and work-

ing plastics granules or compounds until they are able t o

flow . This plasticized material i s then forced under ressure

into a closed mold cavity where t can cool or cure t o form

th e desired part . Productivity i n t h i s process has benefited

from th e adoption of equipment which u t i l i z e s a rotating

screw o perform the injection operation . Raw material i s

fed from a hopper onto the screw which s kept rotating by

a motor . The aterial i s forced over th e f l i g h t s of th e screw

and i s heated by the barrel and f r i c t i o n from the turning

screw   This process heats and plasticizes the material . As

the hot material forces i t s way to the front of the screw, i t

drives the screw backward . The screw stops turning when

the right amount of material reaches the t i p . The screw i s

then forced forward and n j e c t s th e ho t l a s t i c material through

the nozzle of the barrel and hen through a sprue and runner

system into the mold avities . Use of the screw ha s resulted

i n the material being more plasticized when i t enters the

mold, reducing cycle time . Better resins tailored to injection

molding have become available and these have facilitated

plasticization and have reducedproblems arising when las-

t i c material sets up i n the barrel and must be removed .

I n recent years, a type of injection molding known a s

reaction injection molding (RIM) has come into u se 4 RIM

involves the injection of two liquid plastic materials into a

mold . This i s done a t low pressure rather than the usual

h igh pressure . Many improvements i n Rim equipment u se

have contributed to productivity growth .Improved o u tp u t

metering units have resulted i n more rapid mold i l l , and

press speeds have also been increased .The ntroduction of

faster-cure materials has largely eliminated th e need fo r

presses with i l t features which extend the cycle time .

Machine ontrols have continually improved over th e years .

An m portant development i n t h i s regard ha s been th e i n -

creasing adoption of microprocessor controls a s they have

become more affordable . They provide an integrated system

of controls over such production variables a s time, tem-

perature, position, and ressure .They ffer production mon-

itoring capabilities and can maintain various parameters such

as injection velocity and cavity pressure a t optimal, preset

levels i n spite of fluctuations i n operating conditions . The

ability of microprocessors t o detect and adjust fo r changes

i n operating conditions enables them t o keep production

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MONTHLYLABOR REVIEW September 1983 " Productivity Growth i n Plastics Products

machinery operating a t peak efficiency . Their preprogram-

ming capabilities reduce th e needed startup time and their

precise control reduces the reject rates .

Reductions in molding cycle time have also aided pro-

ductivity . Improvements i n mold cooling systems have con-

tributed to reduced molding time . More sophisticated mold

designs have also reduced the time required for th e molding

operation.

Continual improvements i n resins have made im-portant contributions to productivity gains i n molding. Im-

proved resins offer such advantages a s faster flow, easier

ejection, and reduced mold deposit . The advantages of these

resins have reduced the cycle time i n many molding oper-

ations .b

Aignificant development n materials handling ha s been

th e adoption of robots for th e performance of operations

involving such a c t i v i t i e s a s l i f t i n g , t i l t i n g , twisting, posi-

tioning, aligning, or transferring of items . Robots have been

used for a number of premolding and postmolding opera-

tions, such as loading and unloading presses and th e han-

dling and orienting of finished parts for takeaway . Robots

offer th e advantage of working tirelessly without interrup-tion, improving product quality and shortening cycle time .

In addition t o their role with molding machines, robots are

also being used i n such downsteam processes a s trimming

and deflashing . Robots have also proven beneficial for spray

coating plastic parts . The robots offer more uniform and

accurate coating weights and fewer r e j e c t s , while perform-

ing at higher levels of productivity .

The use of lasers has been growing i n the plastic pro-

cessing industry . Lasers have been adopted fo r cutting and

drilling uses and also for their capacity t o measure and

inspect accurately and quickly . Measuring systems can us e

interruption of laser scans to determine dimensions while

inspection units detect disruptions of th e beam when t h i t s

defects, such as bubbles or other flaws, i n the surface .

Analysis of the reflected/refracted l i g h t , generally by com-

puter control, provides information on th e defects . The aser

can be connected with process controls, thus permitting

adjustment of process parameters i n response t o detected

defects . Lasers can cu t thick plastics i n a single step, pro-

viding clean, smooth edges which do no t require abrasive

finishing . The speed and precision of lasers and their ability

to replace manual operations have enabled them t o contrib-ut e t o industry productivity gains .

Outlook f or technology

More frequent adoption of microprocessor controls fo r

production equipment probably w i l l be an important part of

th e future automation of th e industry . Aove toward almost

total computer control of many plants appears to be a very

real possibility . Microprocessor controls for individual ma-

chines could be linked to central computers which coordi-

nate and control th e overall manufacturing operation . '

Increased adoption of robots also appears likely as part

of th e push for greater efficiency ; no t only will there be

more robots but the capabilities of those robots almost cer-tainly will expand . Laser systems w i l l probably also con-

tinue to be adopted .

Improvements i n resins have been an important factor i n

productivity growth and th e industry should continue t o

benefit from th e development and introduction of better

resins . Modifications i n production machinery to take ad-

vantage of new esins may ls o be beneficial to productivity

gains .

Demand for industry output should grow relatively well

i n coming years, as plastics are substituted for other ma-

terials i n th e manufacture of various products . Any further

declines i n petroleum prices would also benefit th e price

competitiveness of plastics products by reducing the cost of

raw materials . 0

FOOTNOTES

Average annual rates of change are based on th e linear least squares

trends of th e logarithms of the index numbers . The miscellaneous plastics

products industry i s composed of establishments primarily engaged in

molding primary plastics for the trade and fabricating miscellaneous f i n -

ished plastics products . The ndustry is designated as si c 3079 in th e

Standard Industrial Classification Manual, 1972 Edition, issued by th e

Office of Management and Budget . Extension of th e indexes appears in

the annual BLS ulletin, Productivity Measures for elected Industries .

2For more information on the subject of pipe, see "Agpipe Picks Up,"

Modern Plastics, March 1975, pp . 54-55; and "Volume Pipe Resin : A

Million-Ton 1977 Market Will Grow 30 percent by 1980," Modern Plas-

t i c s , December 1977, pp . 34-37 .

3 Fo r descriptions of the various processes and d e f i n i t i o n s of many of

th e terms used in the miscellaneous plastics products industry, see Stan-

dards and ractices of lastics Molders and lastics Molded PartsBuyers

Guide (New York, The Society of the Plastics Industry, Inc. , 1965), pp .

35-46  

4See "Many New Developments in RIM achines," Plastic World,

September 1979, pp. 49-51 .

5 "New High-Productivity Equipment Transforms Conventional Pro-

cessing," Modern Plastics, December 1980, pp . 52-54 .

'See "High Productivity an d Economy i n New Grades o f Engineering

Resins," Modern l a s t i c s , October 1980, pp . 52-53 .

'See FrankNissel, "Extrusion's

Next Goal Should Be More Produc-

tivity," and Jack Alger, "The New orld of Computer-Integrated Pro-

duction Systems," Modern Plastics, June 1982, pp . 90 and 94-95

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APPENDIX   Measurement techniques and limitations

Indexes o f ' output per employee hour measure changes i n

the relation between th e output of an industry and employee

hours expended on that output . An index of output per

employee hour s derived by dividing an index o f output by

an index of industry employee hours .

The preferred output index f o r manufacturing industrieswould be obtained from data on quantities of the various

goods produced by th e industry, each weighted (multiplied)

by the employee hours required t o produce one u n i t of each

good i n some specified base period Thus, those goods which

require more labor time to produce ar c given more impor-

tance i n th e index .

I n the absence of adequate physical quantity data, the

output index fo r this industry was constructed by a deflated

value technique . The value of shipments of th e various

product classes were adjusted fo r price changes by appro-

priate Producer Price Indexes to derive real output measures .

These, i n turn, were combined with employee hour weights

to derive th e overall output measure . These procedures result

i n a final output index that is conceptually close to th e

preferred output measure .

Employment and employee hour indexes were derivedfrom BLS data . Employee and employee hours are each

considered homogeneous and additive, and thus do no t r e -

f l e c t changes n the qualitative aspects of labor, such a s s k i l l

and experience .

The indexes of output per employee hour do not measure

any specific contributions such as that of labor or capital .

Rather, they reflect thejoint effect of factors such as changes

i n technology . capital investment, capacity utilization, plant

design and layout . skill and etiort of th e work force, man-

agerial ability, and labor-management relations .

Errata

In "Labor market contrasts : United States and

Europe" by Janet L. Norwood n the August Monthly

Labor Review, two lines were inadvertently dropped

from the paragraphs beginning t th e bottoms of page 3

and page 4 . The paragraphs ar e reproduced below with

the missing lines in boldface .

Paragraph beginning a t th e bottom of page 3 :

The differences and their effects on attitudes toward

policy were discussed a t a recent conference i n England by

experts from Western Europe and North America . The ques-

tion "Has Full Employment Gone Forever?" was answered

far more pessimistically by th e Europeans than by th e Amer-

icans . The attitudes at th e conference were shaped by the

historical framework and expectations of future develop-

ments . The Western European countries had very l i t t l e job

growth during the decade of the 1970's ; and in most of the

European countries, there was l i t t l e i f any expansion of th e

labor force .

Paragraph beginning at the bottom of page 4 :

Youth unemployment high . Young people also tend to be

concentrated i n low-paying jobs-when they work . Youth

unemployment rates ar e a t very high levels in both Europe

and in th e United States . More than 1 of 5 teenagers i n th e

U. S . labor force is unemployed, as is 1 of 7 young adults

aged 20 to 24 . Unemployment rates among British, French,

Italian, and Dutch youth now meet or surpass these high

U. S . levels, while West Germany manages to maintain much

lower rates, especially for teenagers . (See table 3 . )

Reprints of the article are available from the Bureau

of Labor Statistics, Division of Information Services,

Washington, D.C . 20212 .

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