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US plastics machinery shipments up 8 percent in 2013

By: Michael Lauzon

March 21, 2014

The year 2013 generally ended on a high note for manufacturers and suppliers of plastics processing equipment, and in 2014 they can expect another strong year.

The Society of the Plastics Industry Inc. estimated shipments of primary plastics equipment for reporting companies reached $335.1 million in the fourth quarter of 2013, a 3 percent gain over the third quarter. Shipments in the 2013 fourth quarter were about flat with the fourth quarter of 2012, which was an especially robust period juiced by the NPE trade show earlier in 2012.

“The shipments trend has been up for a while and so far it looks like it will continue,” said plastics market economist Bill Wood in a phone interview. “I think there is more run in this uptrend.”

For all of 2013, the total shipment value of primary equipment — injection molding, blow molding and thermoforming equipment — climbed 8 percent higher than the 2012 total.

SPI said the shipment gains compare favorably with U.S. government data that measure activity in the industrial machinery sector. The Bureau of Economic Analysis estimated business investment in industrial equipment rose by 3 percent in the fourth quarter of 2013 vs. the 2012 period. Census Bureau data reported a 25 percent jump in industrial machinery shipments in the fourth quarter.

Injection molding machinery, the highest-value primary equipment sector, saw a 5 percent year-over-year decline in 2013’s fourth quarter but that is more a reflection of the unusual strength of 2012’s fourth quarter, after the NPE trade show put more companies in the mood to buy equipment that year.

Shipment value of extruders was mixed. Shipments of single-screw machines fell 2 percent, perhaps reflecting sluggishness in construction, according to Wood. Shipments of the higher-cost twin screws jumped 72 percent, albeit from a smaller per-unit base compared with their single-screw cousins.

Blow molding machine shipments soared 91 percent higher than a year earlier while thermoforming equipment shipments slipped 34 percent. Relatively small numbers of units shipped for blow molding and thermoforming machines suggests full-year data trends would be more accurate than a snapshot of data for one quarter.

SPI’s Committee on Equipment Statistics also compiles data on auxiliaries such as robotics, temperature controls and materials handling equipment. New orders for reporting companies in this broad equipment class totaled $101.3 million in the fourth quarter of 2013, a 1 percent gain from the strong third quarter of 2013. SPI stated the four-year uptrend in this sector likely continued in 2013 but precise comparisons with 2012 are not possible because of a significant change in the number of reporting companies in 2013.

Overall plastics machinery shipment gains in the fourth quarter of 2013 should be bolstered by trends in the manufacturing sector to give further plastics equipment growth in the coming quarters, Wood predicted.

“Harsh winter weather constrained the [economic] recovery at the beginning of 2014, but accelerating economic growth will return in the springtime,” Wood said. “This will generate further gains in the plastic machinery data.”

SPI’s statistics committee also questions machinery suppliers about present market conditions and future expectations. Reponses for the fourth quarter were similar to those in the third quarter, revealing an upbeat attitude that is prevalent throughout the plastics machinery community. About 87 percent of respondents in the fourth quarter expected conditions to stay the same or improve in the coming quarter while 95 percent expect conditions to hold steady or get better during the next 12 months.

On a geographic basis, North America and Mexico are where strongest gains are expected. Expectations are down a bit for Europe and Latin America.

“North America has the strongest economic growth of major regions,” Wood explained. “Emerging nations are sputtering. Asia has slowed and Europe was flat in the fourth quarter.”

Survey respondents expect strongest demand for plastics and related machinery in automotive, medical and packaging industries. Expectations for appliance and construction sectors have been improving.

Wood’s firm, Mountaintop Economics & Research Inc., contributed to the analysis of the SPI data in the media report.