Equipment manufacturers will have to wait a bit longer for the weak U.S. injection press market to level off - let alone start growing again - as an industry report said injection press shipments slipped below the 3,500 level last year.
The Society of the Plastics Industry Inc. reported 3,455 injection molding machines were shipped in the United States in 2006. That is a 7 percent decline from 2005 shipments. The 2005 number was down 2 percent from 2004.
Press shipments also declined in dollar value by 8 percent, to $786.3 million in 2006.
Injection molding machines suffered from a weak fourth quarter, with shipments of 827 units - what SPI called a ``disappointing'' 13 percent drop from the fourth quarter of 2005, and 14 percent lower than the third quarter of 2006.
SPI said high prices for resin and energy ``continue to constrain the profitability of many injection molders, and this has been an impediment to overall investment in new equipment.''
During the last boom period, which industry officials say will not return, SPI for 2000 reported U.S. shipments of 6,420 presses, valued at $1.23 billion.
SPI's Committee on Equipment Statistics released its report March 29. Looking at other sectors, the bright spot for 2006 was the extruder business. Blow molding machine shipments also increased, although that sector is smaller and more prone to big fluctuations from year to year, according to Washington-based SPI.
Overall, the dollar value of total U.S. plastics machinery shipments declined in 2006, to slightly more than $1 billion last year, a decline of 4 percent from 2005. Even so, economist Bill Wood thinks the U.S. machinery market should level off this year.
``A gradual down trend may well persist through the first half of 2007, but spending for new equipment should begin to pick up in the second half of this year,'' said Wood, who works for Mountaintop Economics & Research Inc. of Greenfield, Mass., and analyzes the numbers for SPI. ``The latest forecast calls for a flat year for shipments of plastics machinery in 2007 followed by a return to growth in 2008,'' he said.
Despite high resin prices, Wood said broad U.S. market indicators remain positive, including a high level of capacity utilization at the nation's plastics factories, a continuing, gradual rise in the production of plastic products, strong U.S. retail sales and a weak U.S. dollar, which boosts exports.
Wood said resin and energy prices are expected to moderate this year, freeing up money for capital spending.
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SPI's 2006 Equipment Statistics
Extruders - After a disappointing year in 2005, shipments of single- and twin-screw extruders shipments rebounded in 2006, SPI said. Extruder shipments totaled 979 units, up 14 percent from the 858 units in 2005. Dollar value of the machines jumped 21 percent, to $139 million.
SPI said production of many extruded products will decline through much of this year, especially construction materials such as pipe, siding and windows.
Blow molding machines - For 2006, 113 blow molding machines were shipped, an 11 percent increase from 2005 shipments of 102 units. The fourth quarter was strong, with 44 machines shipped. However, the dollar value ended up declining by 6 percent, to $75.1 million.
Auxiliary equipment - SPI said auxiliaries gradually declined in the second half, after hitting a cyclical peak in the second quarter. For the full year, SPI reports $350.8 million in bookings, about the same as the strong 2005 total of $350.9 million.
SPI said auxiliary equipment should return to growth in the second half of 2007, as processors invest in equipment that lowers energy, materials and labor costs.
Components - A total of 18,312 screws and barrels for injection molding and extrusion were shipped in 2006. After a strong first-half performance, market demand for screws and barrels gradually declined in the second half, as U.S. manufacturing slowed down.
Source: Bill Wood, Mountaintop Economics & Research Inc. of Greenfield, Mass; SPI