VIENNA (ICIS)–Consumers are “revenge spending” on things they could not do during pandemic lockdowns, services instead of goods, although this is not as much of a threat to the polymers sector as wider economic trends, an analyst told the ICIS European Polymers Conference on Monday.
While there has been concern of a shift in spending from goods to services, and how this could impact the polymer market, Jason Miner, senior global chemicals analyst at Bloomberg Intelligence, said the “real concern” is how people react to bigger economic pressures.
“People are spending money on services – watching a movie or flights are probably not buying [as many] plastic bottles. I think a lot of this is revenge spending – things you could not do during pandemic,” said Jason Miner, senior global chemicals analyst at Bloomberg Intelligence.
“Think limited lifespan. Shift from goods to services is not an overall concern.”
Miner added that the ‘revenge spending’ could last through 2022 but added the impact would be limited beyond this year.
He went on to say the real concern for consumers is the current high inflation environment, and whether they would pull back spending if central banks hike interest rates to rein in inflation.
“You have some regions like the UK where variable rate loans on houses are still very popular. But consumer debt is variable rate … There are some goods you must buy – the big concern in the US right now is a shortage of baby formula. You can skip the trip to visit your friend, unfortunately, but you cannot skip the purchase of a lot of goods,” said Miner.
“I think that concern is overblown, but I think the bounce back in travel will last until consumers feel the pressure of lower wage growth, and possibly higher interest costs. That risk is likely to arrive in the fourth quarter.”
The ICIS European Polymers Conference runs in Vienna on 9-10 May and is the first in-person ICIS conference for 27 months. It brings together the events PET Value Chain, World Polyolefins, and European Recycling. Read the agenda here.
Front page picture: Attendees at the ICIS European Polymers Conference on Monday
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