U.S. shipments of plastics machinery plunged 40 percent last year, as the machinery sector absorbed the most serious declines of the overall plastics industry, according to statistics from the Society of the Plastics Industry Inc.
SPI said suppliers shipped $1.04 billion worth of plastics machinery in 2001, down 40 percent from $1.75 billion in 2000. Sales of most types of equipment dropped off abruptly in the second half of 2000, after the NPE 2000 show, according to SPI and machinery executives.
But things got even rockier as 2001 wound down, in the wake of the Sept. 11 terrorist attacks and an already-slowing U.S. economy.
SPI said fourth-quarter shipments sank 42 percent compared with the fourth quarter of 2000.
The sales figures include machines from domestic manufacturers and importers. The total does not include extruders and components such as screws and barrels, although SPI does report some unit data on those segments.
Lori Anderson, SPI senior director of economic and international affairs, released the numbers in a report May 6 to the SPI Machinery & Moldmakers divisions' spring meeting in Palm Beach, Fla. The Committee on Equipment Statistics compiles the numbers.
Although machinery executives are hopeful sales will pick up this year, the 2001 statistics depict an ugly, paint-by-lousy-numbers portrait. Every segment plunged, except for blow molding, which showed a modest increase, SPI said
Making the abrupt falloff even harder to digest is that it follows a period of solid, at times booming, sales during the 1990s. But SPI said: ``The days of nearly guaranteed growth in equipment shipments, 1989 through 1997, are officially over. Shipments have declined in two of the past three years, and 1999's rebound did not compensate for the drop in 1998.''
Sales per machinery-company employee also have declined in two of the past three years after increasing for 10 straight years, from 1988-97, SPI said. That apparently reflects reduced operating efficiencies as manufacturers have restaffed and laid off workers, the Washington-based trade association said.
As 2001 moves into the record books, the big question now is, when will plastics processors start buying new machinery again?
The SPI report looks at the implications for machinery from several macro-economic measurements - leading indicators such as gross domestic product, the Institute for Supply Management's purchasing index, the production of cars and durable goods, and consumer confidence.
Too many machines sitting idle remains a big stumbling block to new-equipment orders. Capacity utilization for plastics and rubber plants has ticked up a bit so far this year. The Federal Reserve Board said the utilization rate moved from 76.4 percent in January to 76.7 percent in February and 77.2 percent in March. The April number is due out May 15.
Machinery-company executives say the rate has to hit at least 80 percent, or better yet, the mid-80s, before they will see a solid rebound in sales.
Last month at Milacron Inc.'s annual shareholders meeting, the largest U.S. plastics machinery maker said significant spending for new machines will lag two or three quarters behind any solid pickup in manufacturing.
The SPI report said GDP increased in the fourth quarter, after contracting in the third quarter. That's a positive sign that the recession may have ended, although SPI said: ``There is still uncertainty whether this trend will be long-lived and/or robust.''
SPI said fourth-quarter numbers for new equipment orders provide ``a hint of promise for the future.'' Machinery makers began 2001 with a first-quarter new order rate of $312.5 million, down more than 20 percent from the fourth quarter of 2000. Demand continued to fall throughout 2001, until SPI reported a slight increase in the fourth quarter, to $298.2 million. Again, the dollar amounts do not include extruders or components.
The injection molding and extrusion machinery sectors got hit hardest for the full year. Here is a look at the machinery sectors for 2001.
A total of 3,585 injection presses were shipped to U.S. customers in 2001, a drop of 44 percent from 6,420 presses in 2000. Measured in dollars, shipments fell 44 percent to $688.7 million, down from $1.23 billion in 2000.
In the fourth quarter shipments plunged 48 percent from the final quarter of 2000, and dollar shipments sank by nearly the same percentage.
On the positive side, shipments of both injection presses and blow molding machines showed a burst of growth to end 2001, increasing from the third to the fourth quarter.
Also, SPI said the average price of an injection press stayed fairly stable during the two years, at $192,102 - even as shipments fell.
Blow molding machine shipments enjoyed a small increase in units, but a decline as measured by dollar sales. Shipments totaled 170 units for 2001, up 4.3 percent from the 163 units the industry shipped the year before. The dollar volume fell to $80.4 million, down 28 percent from $111.9 million in 2000.
The fourth quarter was a similar story. Units increased 31 percent from the same quarter a year earlier. But measured in dollars, shipments fell 20.6 percent.
Of all the equipment segments reporting in dollar shipments, blow molding recorded the smallest decline in sales from the fourth quarter of 2000 to the fourth quarter of 2001, according to SPI.
The average selling price was $472,970 - about one-third lower than the price in 2000.
SPI again is reporting only on units for extruders, both single-screw and twin-screw machines. Unit shipments totaled 882 in 2001, down 45.3 percent from 1,612 the year before. In the fourth quarter, shipments fell 25.2 percent from the same quarter of 2000.
Shipments of auxiliary equipment totaled $275.9 million in 2001, down 33.1 percent from $412.5 million the year before. Companies reported shipments were off 32.1 percent in the fourth quarter from the end of 2000.
The sector includes temperature controllers, chillers and cooling towers, blenders, conveyors, tanks, dryers, granulators and robots.
Screws & barrels
SPI said 8,065 barrels and 8,405 single-screws were shipped last year.