Our View: 2022 outlook bright, but some obstacles remain

Forecasting, whether it be the weather for next week or the rubber and tire industry for the next year, is an inexact science at best. Everything can look promising until an unexpected weather front—or perhaps a computer microchip—takes an unanticipated turn for the worse.

In looking at the prospects for 2022, stakeholders across the rubber goods, tire and supply sectors seem primed for a strong year, but there likely are some crossed fingers driving hope that everything goes well for business as the world enters the third year under the shadow of the COVID-19 pandemic.

Anne Forristall Luke, CEO of the U.S. Tire Manufacturers Association, may have summed it up best when she said the tire industry has a lot of demand and momentum in the market, but there also are headwinds that will make an impact.

Some of those are factors that all industries—including tire and rubber—dealt with throughout 2021. Those include the supply chain nightmares that have plagued nearly every facet of the movement of freight, along with a labor market where attracting and keeping workers continues to be a struggle across all business sectors. At this point, nobody seems to see light at the end of the supply chain tunnel, and the area of work force development is bigger than any one industry, Luke said. There will need to be a collaborative effort to bring about change.

Now, there are other new issues that may impact demand this year. One official in the rubber process oils business said demand in 2021 remained strong for all 12 months. Going into 2022, all of his firm's customers project the sector to show growth, and he said his company is ready to supply their needs. But there is something telling him not to be surprised if the inflationary factors that are starting to creep into the economy take hold and, at some point during the year, cause consumers to cut back on discretionary spending.

Automotive is one area that, as usual, will go a long way in determining the fate of many rubber-related companies. That also is a sector that carries a bit of uncertainty coming into 2022, with the microchip shortage expected to continue to drag down production for now.

Showing that all things are relative, those responding to an Association of Rubber Products Manufacturers survey put automotive at both ends of the spectrum, naming it the second most optimistic market for 2022, but also the least overall optimistic market.

Now there's a forecast even a meteorologist could love: It's going to be sunny—unless it's not.