In 2022, processors in Germany increased turnover by more than 12% on the year to EUR 78.9 bn, according to the country’s association of plastics converters, the Gesamtverband Kunststoffverarbeitende Industrie (GKV, Berlin; www.gkv.de).

For comparison, sales in the initial pandemic year of 2020 stood at a modest EUR 61.6 bn. Last year, business abroad grew significantly, rising nearly 20% to around EUR 33 bn.

This might sound like a success story, but appearances can be deceiving. As association president Helen Fürst noted at the group’s annual press conference in Frankfurt, a “considerable proportion” of the sales growth was attributable to cost increases, above all for energy.

According to GKV figures, 40% of companies in the plastics processing industry were unable to increase earnings despite sales growth, a 12 percentage point rise on the previous year.

The volume of processed plastics, on the other hand, fell 3% to 13.6 mn t, of which nearly 17%, or some 2.4 mn t, was recyclate. This represents an increase of 9% on the previous year.

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The reason for the decline in the volume processed was mainly the poor economic situation in the chemical and automotive industries, Fürst said, but weak demand from many brand manufacturers and the stagnation in the construction sector also had an effect.

For processing volumes, the construction sector and its 5.1 mn t (2021: 5.2 mn t) was still well ahead of the packaging segment at 4.2 mn t. These were followed by technical components at 2.9 mn t, which was ahead of consumer products at 1.4 mn t. In terms of sales, construction led the way at EUR 27 bn, which was a rise of around 12% on the year. The biggest leap came in packaging, where turnover grew nearly 15% to some EUR 18.6 bn.

Across all segments, the downward trend of recent years seems to have come to a halt, Fürst said. She noted that a recent association survey of GKV member companies in January 2023 showed that both the general economic situation and sales expectations are now no longer regarded as quite so gloomy as they were in the autumn of 2022. Nevertheless, high energy costs are clouding industry optimism and putting a damper on expectations of how earnings will develop in the coming months.

The export quota at companies rose 2.6% to 41.4% last year, with around a quarter of firms telling the GKV that they also expect to be able to increase the share of shipments abroad even further. Over 80% of processors said the most important foreign markets are other EU member states.

The investment climate has also improved. Nearly 40% of companies said they intend to invest more in 2023 than they did last year. Above all they see a need to spend on better energy efficiency, climate protection, and modernising their production plants, said GKV executive director Oliver Möllenstädt.

However, energy prices continue to hang like the proverbial sword of Damocles over developments. “The entire electricity price system must be changed,” Fürst said, noting that if gas and electricity remain as expensive as they have been until now, an increasing number or companies will face the threats of job cuts or shifting production abroad.

The GKV president said the measures undertaken by politicians to cap energy prices are completely inadequate and involve an “enormous bureaucratic expenditure” that simply cannot be dealt with by small and medium-sized companies.

Möllenstädt echoed Fürth’s concerns, citing a “tsunami of regulations” with which politicians are inundating German businesses.