CINCINNATI - Composites shipments will improve a modest 3 percent this year, with growth slowing in all market segments, according to data released Feb. 5 in Cincinnati by the Composites Institute. All segments will grow less than 5 percent in 1996, and the rate of growth will be lower than in 1995. A composites gain of 3 percent still would outpace - although just barely - the growth of the overall U.S. economy, according to Composites Institute officials.
Meanwhile, a composites industry economist called on the Federal Reserve Board to cut interest rates even more. Catherine Gillis, manager of market research and planning at Vetrotex CertainTeed Corp. of Valley Forge, Pa., said the Fed should cut rates by at least 0.5 percent.
The composites industry continues to grow faster than the overall economy because of material substitution and the growing commercialization of hybrid products that blend high-tech composites with traditional materials such as wood, concrete and aluminum, according to Catherine Randazzo, executive director of the New York-based Composites Institute. Randazzo outlined the 1995 data, and gave 1996 projections, to kick off the trade group's annual exposition Feb. 5-7.
The institute, a division of the Society of the Plastics Industry Inc., said 1995 shipments reached roughly 3.18 billion pounds, a 4.4 percent increase over 1994. This year, the trade association projects that shipments will grow 3.1 percent, to about 3.27 billion pounds. The numbers include thermosets, thermoplastics, reinforcements and fillers.
Gillis said the two largest composites markets, transportation and construction, are flat. Passenger car sales have been slower than expected, although some of that can be traced to growing truck sales. One major new application, Ford Motor Co.'s new AeroMax 9500, contains a whopping 450 pounds of sheet molding compound, the most of any U.S. vehicle.
The market ``probably has peaked'' after two good years for heavy-duty, Class 8 trucks, a major consumer of composites, Gillis said.
Still, automotive, by far the largest composites consumer, will grow 3.3 percent in 1996, passing the milestone 1 billion-pound mark. Material substitution and parts consolidation continue to drive growth.
Randazzo said there are 80 new SMC parts slated for production in 1996, nearly three times as many as 1995. They include an integrated front-end module for the Ford Taurus/Sable, and four new composite hoods.
Turning to construction, composites have continued to grow even as new-home construction stays flat, because new homescontain larger bathrooms and whirlpool baths - big composites users, Randazzo said. Also, the market is expanding to include composites bridges, pilings, reinforcing bars and bridge column wrapping. The construction sector should use 642.7 million pounds of composites in 1996, up 2.5 percent from 1995, according to SPI projections.
Gillis gave a speech focusing on a balanced federal budget and the deficit. She said the government's deficit spending on consumption - such as entitlements and transfer payments - is worse than money spent helping industries develop new technology.
Unfortunately, that subtlety gets lost on the American public, lost to the political Super Bowl of ``who's winning, who's losing,'' she said.
``It's again become an abstract thing - all deficits are bad. But when you think about it, some deficits are good. Think about your mortgage,'' Gillis said.
Like a mortgage, spending on technological development is an investment in the future, she said.
Composites have benefited from federal funding to prompt new technology, under the Advanced Technology Program and Manufacturing Extension Partnership. Past composites shows have highlighted funding under those programs. But those Commerce Department programs are under fire from congressional budget cutters.
Randazzo said the Composites Institute is not involved in the political debate over the ATP and MEP funding.
Other data presented by the Composites Institute:
Corrosion-resistant equipment grew by 4.9 percent in 1995, to 394.6 million pounds. The market should grow 2.5 percent in 1996, to 404.5 million pounds.
Marine continued its rebound, growing to 375.1 million pounds in 1995, up 3.2 percent from 1994. In 1996, marine will grow 3 percent, to 386.3 million pounds.
Electrical/electronic products had the strongest level of growth of any segment in 1995, 5.3 percent, to 315.1 million pounds. This year the market should grow 3.9 percent, to 327.5 million pounds.
Consumer products grew 5 percent in 1995, to 183.6 million pounds. The Composites Institute said shipments will climb 4.4 percent, to 191.7 million pounds, this year.
Appliance/business equipment shipments grew 3.6 percent in 1995 and should increase 2.2 percent in 1996, to 170.1 million pounds.
Aircraft/aerospace/defense will continue to decline, but only by the minute amount of 0.4 percent in 1996, to 23.9 million pounds.