Improve Economic Outlook to Benefit Rubber & Plastics Industry
March 22, 2013 - NEW YORK, NY
2012 was a challenging year for rubber & plastics industry. Still, the plastics industry did well due to an increase in exports of molds and machinery. With the last minute fiscal cliff deal signed by lawmakers in Washington D.C. earlier this year, a great deal of economic uncertainties was averted. Recent economic data from the U.S. has also been very encouraging, which augurs well for companies such as Cooper Tire & Rubber Company (NYSE: CTB) and Carlisle Companies Inc. (NYSE: CSL).
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Plastic and rubber products are used in a range of industries and consumer goods products. The demand for these products, therefore, is directly dependent on the state of the economy. Last year, concerns over the fiscal cliff issue had created a wave of uncertainties in the U.S. Despite these uncertainties, the U.S. plastics industry did reasonably well in 2012. Since the start of this year, the U.S. economic outlook has improved significantly. One of the main reasons for the improved outlook is the fiscal cliff deal, signed by lawmakers at the start of 2013. In addition, economic data from the U.S. continues to show signs of improvement. Manufacturing activity in the U.S. has been expanding. Housing market is also continuing to recover.
The global economy has also shown signs of strengthening even though concerns over the Eurozone debt crisis remain. Given the global economic environment, outlook for companies such as Cooper Tire & Rubber Company and Carlisle Companies Inc. has improved significantly.
Last month, Cooper Tire & Rubber Company reported record net sales for the fourth quarter and full year 2012. For the fourth quarter, the Findlay, Ohio-based company reported net sales of $1.1 billion, representing an increase of 2% over the same period in the previous year. For the full year 2012, the company reported net sales of $4.2 billion, up 7% over 2011.
Roy Armes, CEO of Cooper Tire & Rubber, said that despite challenging global economic and industry conditions, their employees around the world continued to execute its strategic initiatives including diversifying its channel and product mix for light vehicle tires as well as expanding volumes in the truck-bus radial tire segment.
Looking ahead, Cooper Tire & Rubber Company expects first quarter raw material prices to be approximately the same as the fourth quarter. The company also expects economic and industry headwinds to continue.
Conversely, Carlisle Companies Inc. also reported record net sales for 2012 last month. The company's net sales from continuing operations stood at $3.63 billion in 2012, representing an increase of 12.60% over the same period in the previous year.
Carlisle Companies Inc.'s CEO David A. Roberts noted that despite continued economic uncertainties, the company expects further growth in sales and earnings in 2013 through its focus on long-term strategy. Roberts said that for 2013, the company is planning for sales growth to total in the mid-to-high single digit percent range.
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