Economist Bill Wood foresees growth of 3-4 percent in U.S. injection molded products for the rest of 2007, which should be good news for injection press manufacturers, whose slumping shipments dragged down overall U.S. primary plastics equipment shipments in this year's first quarter.
Typically, this level of growth is needed to spur new investment, according to Wood, president of Mountaintop Economics & Research Inc. of Greenfield, Mass. He offered his analysis of preliminary first-quarter data at the May 6-8 joint spring conference of the Society of the Plastics Industry Inc.'s Machinery, Molders and Moldmakers divisions in Tucson.
Wood cited SPI Committee on Equipment Statistics numbers to reveal that sharply stronger U.S. shipments of extrusion and blow molding equipment failed to offset a 21 percent decline in the dollar value of injection molding machinery shipments in 2007's first quarter, compared with the year-ago period
The weak showing by injection press makers led to an 11 percent decline overall in the value of total U.S. primary plastics machinery shipments in January through March. Due to the seasonality of equipment sales, Wood prefers to compare quarterly data with the same year-ago quarter, rather than with the previous three months.
``I believe we are very near the bottom of that trough,'' Wood said, despite the depressed numbers in early 2007. ``I believe that starting in the second half of this year, that trend will return to a gradual increase.'' He sees the tide turning late in the third quarter or early in the fourth.
Auxiliary equipment bookings slid 8 percent in the first quarter this year from January through March 2006, while the unit shipments of components (screws and barrels) appear to have decreased by about 10 percent in the same period, according to the SPI data.
Wood cited his company's own research to suggest a steep 2007 first-quarter drop in the U.S. mold business, while projecting a more optimistic view for plastics processing activity.
In addition to the expected uptick by injection molders, he noted U.S. plastic sheet manufacturers are ``doing best'' (despite sluggish sales in the building products sector), while film makers are doing well and blow molders also ``will do better this year.'' He said film and sheet tends to lead all plastic products into or out of recession.
Wood noted even though, at 85.5 percent in March, overall U.S. plastics production capacity utilization is down a few percentage points from a year ago, plastic product output still is up.
``Significant portions of the plastics markets are growing, at very slow rates, over the past 12 months,'' despite the dip in capacity utilization, he said. ``That doesn't happen often, and that doesn't last long. ... I think it will be good.''