After treading water in 2001 and then starting a modest rebound in 2002, the struggling U.S. machinery market actually fell back a bit in 2003, according to the Society of the Plastics Industry Inc. - but SPI said demand is building this year.
``The downward momentum has stopped and so far we're generating some upward movement,'' said Bill Wood, an economist who analyzed the data for Washington-based SPI.
Wood is predicting moderate growth for machinery this year, based on stronger economic indicators such as U.S. production of plastic products and capacity utilization. U.S. processors now are operating at 82 percent of capacity. Utilization could hit 85 percent by the end of 2004, a level that would spur broad-based machinery buying, said Wood, president of Mountaintop Economics & Research Inc. of Colrain, Mass.
Until then, the machinery market this year will be driven by the need to replace older equipment, and by pressure to improve productivity, he said.
The SPI Committee on Equipment Statistics issued the full 2003 numbers May 4, during the Machinery and Moldmakers divisions' spring conference in Orlando, Fla.
The news in the year-end report is that plastics machinery did not find its ``floor'' in 2001 or 2002, as many machinery officials had hoped, but slipped lower in 2003.
Overall machinery shipments totaled $1.18 billion, a slight decrease from the $1.19 billion shipped in 2002. Also declining were shipments of injection presses, extruders and auxiliary equipment. Only blow molding machines and screws and barrels showed an increase.
New orders totaled $1.22 billion, 3.2 percent lower than $1.26 billion in 2002. Machinery declined for 2003 even though it was an NPE year.
SPI said a profit squeeze by plastic processors could continue to hurt equipment sales, through at least the first half of 2004.
Here is a look at the machinery segments for 2003. The term ``shipments'' means machines delivered to U.S. customers, including both domestic and imported equipment.
The key injection molding machine sector was basically flat, at 3,585 units in 2001 and 3,536 in 2002 - a big 45 percent decline from 2000, the last very strong year. Then in 2003, injection press shipments fell to 3,290 units, or 7 percent lower than 2002.
Although units declined, the dollar value of injection presses remained the same in 2003, at about $688.5 million. SPI gave the apparent reason in a size-breakout: Small and medium-tonnage presses suffered double-digit declines, but large presses - which cost more - increased 6.2 percent, from 194 units in 2002 to 204 units in 2003.
SPI said all technology segments of injection molding declined in unit shipments last year: all-electric presses, hydraulic/toggle presses, horizontal-clamp presses, vertical-clamp machines, single-material and multimaterial machines. When measured by dollars, however, the horizontal-clamp and single-material machines showed a slight increase.
SPI said blow molding machines were a bright spot for 2003, as unit shipments jumped 19.4 percent from 108 machines the year before. Measured in dollars, blow molding machines reached $93.8 million in 2003, a 10.5 percent gain from $84.9 million in 2002.
``There was no activity in fuel-tank machines between 2000 and 2002, so 2003 reflects the resumption of that [business].
``General-purpose [blow molding] machines are still under pressure. There are many used machines on the market,'' from closed toy makers and from bankrupt custom molders.
First-quarter 2004 numbers also are ``not very impressive,'' he said.
But there is one area of optimism. The pending California air-emission regulations, coming in 2007, potentially will affect cars, trucks, pleasure boats, even lawn mowers. The result is likely to be heightened demand for coextruded, six-layer fuel tanks to replace current monolayer tanks. The blow molding machinery business might benefit from these changes.
SPI covers extrusion blow molding, accumulator-head machines and machines that can blow containers larger than 7.8 gallons. The numbers do not include injection blow molding machines, injection stretch blow machines or two-stage PET machines.
The extrusion sector, which includes single- and twin-screw machines, declined in 2003.
SPI reports shipments of 857 units, a decline of 6.2 percent from 2002. Shipments also declined in dollar terms, slipping 4.1 percent, to $115.2 million. For extruder suppliers, 2003 was a choppy year of up-then-down quarters.
Bookings of auxiliaries totaled $286.3 million, down 4.1 from the 2002 figure of $298.5 million. Auxiliary bookings declined from the final quarter of 2002 through the third quarter of 2003, before rebounding to end the year.
The auxiliary segment includes temperature controllers, chillers, cooling towers, blenders, conveyors, tanks, dryers, granulators and robots.
Screws and barrels
Screw and barrel shipments, called ``components'' in the SPI report, grew a solid 8.6 percent to reach a total of 15,835 units, up from 14,573 units the year before.
Of the total components shipped, 10,627 went to injection molding and 5,208 for extrusion.