In 2020, Latin America’s rubber and plastic industry witnessed a sharp decline in production output as a result of the COVID-19 pandemic. Over the 2021-2030 period, rubber and plastic producers in Latin America are projected to experience slow recovery, due to high economic uncertainty and political instability. Moreover, structural challenges, supply chain disruptions and stricter environmental regulations will pose additional challenges to manufacturers of rubber and plastic products.
The rubber and plastic industry in Latin America remains underdeveloped, accounting for 3.5% of global production in 2020. The region’s competitiveness is faltering due to political instability, widespread corruption, large informal sector, lack of skilled workforce and poor infrastructure. Moreover, Latin America is among the worst affected regions by the COVID-19 pandemic. Due to economic and policy uncertainty, the industry is projected to witness slow recovery and reach 2019 production levels only by 2028.
Due to a large domestic manufacturing sector, Brazil is set to remain the largest rubber and plastic producer in Latin America. However, the country is forecast to register sluggish growth over 2021-2030, especially in the rubber products segment. The prolonged COVID-19 crisis, political turmoil, supply chain disruptions and structural bottlenecks will hamper manufacturing sector development, hindering B2B demand for rubber and plastic products.
Mexico is expected to lead the region’s growth in absolute terms through to 2030 and remain the second largest rubber and plastic producer in Latin America, driven by an expanding automotive sector and increasing demand for plastic packaging. On the other hand, rubber and plastic production in Argentina will shrink the most across regional countries, undermined by ongoing economic crisis and extremely high inflation.
Mexico is the largest exporter and importer of rubber and plastic products in Latin America. The US-Mexico-Canada Agreement, which entered into force in July 2020, is expected to boost trade flows between participating economies.
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