Most disposable glove factories prefer to run their production lines almost non-stop to make money, in a concept known as factory utilization. It is common that a factory needs a 50% utilization rate to break even.
Throughout 2023, factory utilization rates for most of the disposable glove industry have been well below 50% because of massive capacity added during the pandemic and high excess inventory amounts at the end-user level.
Costs of doing business in the disposable glove market seem to be leveling off after several years of big swings. United Parcel Service and the Teamsters reached a deal to avoid a strike by getting the raises the drivers wanted. Thus, higher labor costs will likely affect the price of most goods they transport.
The International Longshore and Warehouse Union and Pacific Maritime Association also forged their own deal after months of labor strife; you can expect that agreement to eventually factor into product costs as well.
As we look forward to Q4 of 2023, the year has been a mixed bag of outcomes for disposable gloves.
The pandemic boosted demand, and more gloves are used in North America than ever. At the same time, many large distributors and end users are still dealing with excess inventory, as prices have dropped and challenges with labor, logistics, and factory utilization continue.
Every quarter, AMMEX examines the impacts of key drivers on the disposable glove market.
The market, and the aspects of distribution surrounding it, are extremely nuanced. We don’t have a crystal ball, so we’re not telling you what will happen. We’re not even trying to make predictions—our goal is to highlight the primary factors influencing the market.
The push is on to return workers to offices across the country. Both commercial and government entities are exerting pressure to persuade currently remote employees to come in from the field, at least three days a week and in many cases full-time.
That puts janitorial and sanitation workers in the spotlight once again. Offices that have sat vacant since the pandemic first spread in 2020 again will have to be regularly cleaned and sanitized.
Sustainability has evolved from buzzword to mantra to guiding principle for many. Operating from the notion that resources are finite and should be used with a view toward long-term priorities, it’s pure in intent yet can be polarizing.
It is a topic that often comes up in conjunction with disposable gloves. Long the subject of pressure from activists and start-ups intent on somehow reinventing the product, single-use gloves have by their very definition proven elusive as the target of environmental crusaders.
As we’ve mentioned in recent weeks, despite overall volatility in global markets, disposable gloves are in a good place.
The first half of 2023 has seen a number of factors pose challenges: threats of recession, interest rate hikes, persistent inflation, and a general sense of dread about the short-term health of the economy (which has, nevertheless, largely remained strong).
Myriad issues can influence the cost and availability of disposable gloves. These factors were of course magnified during the pandemic, where unstable prices and abrupt twists and turns of availability drove buyers and sellers alike to take any steps necessary to acquire product.
Regardless of how the market has changed post-pandemic, one thing that remains the same is that most gloves are sourced from across the world, specifically SE Asia and China. This is where the variables begin to stack up, from manufacturing costs to ocean shipping to domestic transport.
The disposable glove market—like all markets—loves economic stability and predictability. Uncertainty will lead distributors, sellers, and end users to plan for the worst when it comes to pricing.
The first half of 2023 has been volatile for markets. Investors have had to contend with the possibility of a recession, a banking crisis, interest rate hikes (and pauses), sticky inflation, and a softening U.S. economy. The International Monetary Fund warned in the spring of volatile commodity prices posing economic challenges in coming years.
But this economy just won’t give in to negative expectations.
When it comes to the disposable glove market, demand planning—pricing and inventory—is the focus of most conversations. We understand why: Clients want to know when it will return to a predictable state, similar to four or five years ago.
The disposable glove market was consistent for almost a decade, with stable prices and predictable growth, leading up to 2020. The key variables that shape it (production, logistics, distribution, etc.) had been well-optimized.
