How are North America's plastics processors doing? Well, there's good news and bad news. First, the bad: For the third year in a row, our ranking of North American injection molders is going to be slightly smaller than the year before.
The ranking, which you'll see next week in our April 10 issue, will include 641 companies. That's down from 655 in 2005, 688 in 2004, and 694 in 2003.
What's causing the shrinkage? Mostly mergers, plus a handful of companies (mostly small firms) have gone out of business. The big firms aren't exactly shining — half of our Top 10 are restructuring or in bankruptcy.
We know our ranking doesn't include every injection molder in North America. But it's a great source of data on all of the major custom molders and most of the significant proprietary and captive firms, too.
I don't think a 2 percent decrease in the number of firms in one year is a reason to panic, but the trend — a drop of 7.6 percent in three years — is a sign that the region's manufacturing sector still needs help getting back on its feet. (With that in mind, why does the Federal Reserve continue to raise interest rates? Is it watching the same economy I am?)
Now the good news: Based on my favorite economic measure, the completely unscientific “Plastics News headline test,” it does seem like processors are starting to turn the corner.
So far this year, we've run about twice as many stories on companies expanding in North America as firms shutting down, closing plants or filing for bankruptcy. It's anecdotal, of course, but I think it´s an excellent early indicator of industry strength. Our reporters are constantly watching for both types of news, and the fact that they're finding the good stuff is a positive sign.
Our injection ranking issue will be chock-full of more expansion news next week. It's a nice change from the headlines we were writing just a few years ago.
Loepp is managing editor of Plastics News.