By: Bill Bregar
April 4, 2013
WASHINGTON — The U.S. turnaround continued in 2012 for sales of injection molding machines — by far the largest plastics machinery segment — while extruders and blow molding machine segments were flat or down, according to the Society of the Plastics Industry Inc.'s Committee on Equipment Statistics.
Washington-based SPI also released statistics on hot runners and blown film equipment for the first time ever, and delivered its second annual report on thermoforming machines. Meanwhile, the components segment — screws and barrels — has been indefinitely suspended from reporting.
Economist Bill Wood, who provides an analysis for the SPI numbers, said extrusion machinery seemed to be at a cyclical bottom in 2012. He is predicting gradual improvement this year, in part fueled by a recovering construction sector.
An overall trend for U.S. capital spending resumed its upward movement in the fourth quarter, and Wood expects that to persist throughout 2013.
Solid growth in the automotive market will continue, said Wood, who runs Mountaintop Economics and Research in Greenfield, Mass. Medical and packaging are growing, while electronics and appliances have just passed a cyclical bottom and should remain fairly flat.
"The fundamental incentives for strong investment in capital equipment remain intact," Wood wrote in his report. "These include: high levels of profits for U.S. corporations, a continued premium on increased productivity, and the incessant desire to promote energy efficiency."
Wood thinks U.S. plastics product manufacturing is "chugging steadily upward," and he forecasts that in 2013, plastics volume will grow by 5 percent. Capacity utilization, which averaged only about 79 percent in the fourth quarter of 2012, should exceed 82 percent by the end of this year, he predicted.
Here is a recap of the SPI machinery statistics:
SPI reported that 3,307 injection molding presses were ordered in all of 2012, for a 16 percent increase from the order level of 2011. The trend for injection presses is definitely on the upswing — the strong showing in 2012 follows a 13 percent increase in orders in 2011.
The total dollar value of injection presses in 2012 grew by 20 percent over 2011.
Wood is predicting a gain of 6-8 percent this year, which would mean new orders should be at least 3,500 units. He said shipments should grow 8 percent, to 3,300 injection presses shipped in 2013.
SPI also gives some information about injection machinery segments in the fourth quarter of 2012. New orders of all-electric presses increased by 12 percent, according to the report, while sales of hydraulic machines grew by 17 percent.
"Since hitting their respective cyclical bottoms in 2009, the trend in the hydraulic data still looks a bit stronger than the trend in the electric data, but not by much," Wood wrote.
In the fourth quarter, orders for horizontal machines increased by 17 percent, but vertical press orders dropped 27 percent.
"Overall, 2012 was a pretty good year for single-screw extruders, but demand was weak for both co- and counter-rotating twin-screw machines," Wood wrote in the report. "We still expect that the overall market fundamentals for extrusion machinery will gradually improve in 2013, with the best growth coming in the second half of this year."
A construction industry pickup is happening, but Wood notes there is a lag in new-extruder buying because building product makers first try to boost capacity by restarting existing machinery. But market demand for extruders should rebound more sharply in the second half of this year.
SPI said new orders for single-screw extruders was flat in 2012, with a decline of less than 2 percent, or 13 fewer units that 2011. But the dollar value jumped 38 percent, a trend that should continue.
Wood predicts orders of single-screw extruders should gain 8 percent in 2013. That would put the annual total at 960 units.
In the twin-screw extruder sector, the annual order total for 2012 declined by 29 percent from 2011. The drop was a bit heavier for co-rotating twin-screw lines (down 31 percent) than it was for counter-rotating machines (down 25 percent).
This year, Wood thinks twin-screw extruders will gain 15 percent, in both units and dollar value.
SPI said 67 blow molding machines were ordered in 2012, down 21 percent from the 85 blow molders ordered in 2011.
The annual dollar value was down 34 percent from the 2011 total.
Wood thinks orders in 2013 will hit the 75 to 80 range, with a total value of $75 million.
Blown film equipment
For 2012, orders for new lines and new extruders were both up by 3 units. The annual totals for orders of dies, air rings and winders declined substantially from their 2011 totals.
"The forecast calls for steady-to-down market conditions for the first half of 2013, but positive numbers are expected for the second half of this year as the prevailing economic conditions in the U.S. gradually improve," Wood said.
SPI reports that the total number of auxiliary equipment units booked increased by 17 percent in 2012 from the year before. The total dollar value was up 15 percent.
Again this year, a significant change in the number of companies reporting the data resulted in SPI officials not including the comparative numbers from 2011.
Wood is forecasting a gain of 6-8 percent for both units and dollars in 2013.
Breaking out some auxiliary categories, robot orders were up 23 percent in 2012, a growth trend that is gaining momentum. Orders for granulators jumped 28 percent. New orders for water and temperature control units grew by 22 percent. Sales of material handling units increased by 12 percent.
New orders for thermoforming equipment were up 24 percent, at 173 units than it was in 2011, according to SPI. The dollar value increased by 26 percent.
Wood thinks the thermoforming machinery sector should grow about 8 percent in 2013.
There were 5,264 hot runner units booked in 2012, a 2 percent gain from the 2011 total. But the dollar value grew by a solid 22 percent.
SPI reported a sharp drop in orders in the fourth quarter of 2012, however, and it hit all categories. Manifold systems fell sharply while hot valves were flat. Both valve gates and open gates declined.
"The forecast for this market calls for continued growth in hot runner demand in 2013 when compared with 2012, but the strongest gains will occur during the second half of this year," the report said.
Wood predicts the number of orders booked in 2013 will increase 5-6 percent, and dollar value will gain 8 percent.