U.S. shipments of plastics machinery remained soft in the second quarter of 2008, as all segments — injection presses, extruders, blow molding machines, and screws and barrels — fell from the second quarter of 2007.
Auxiliary equipment also declined.
But a few bright spots emerged, as injection presses and screws and barrels used for injection showed improvements over the first quarter of 2008, according to the Society of the Plastics Industry Inc. in Washington.
Economist Bill Wood forecasts that spending on industrial equipment will remain ``moderately negative'' for the rest of 2008. But investment should begin to rebound in 2009, as residential construction starts to turn around and credit markets stabilize, Wood said.
U.S. plastics processors also will benefit from a weak dollar, which will help them export more, Wood said.
Wood of Mountaintop Economics & Research Inc. in Greenfield, Mass., analyzes the shipment data for SPI's Committee on Equipment Statistics.
Wood is predicting a slow recovery for the U.S. economy and the plastics industry next year. Capacity utilization for the nation's plastics factories slipped to 80-81 percent in the second quarter of 2008, from a steady range of 86-87 for most of last year. The second-quarter figure also is below the long-term historical average, but much higher than levels during the last recession in 2001, according to Wood.
Sustained rates of 86 percent and higher are needed to trigger widespread spending on new equipment and tooling, he said.
Here is a look at each machinery sector:
Injection molding machines. Second-quarter 2008 shipments of 669 units marked a 7.5 percent decline from the second quarter a year ago. But SPI reports that figure is 3.6 percent more than shipments in the first quarter of this year.
The second-quarter total is 22 percent lower than the five-year average for injection presses shipped in the second quarter, SPI said.
U.S. injection press shipments totaled 2,862 for all of 2007.
Extruders. SPI reports 190 unit shipments of single- and twin-screw extruders in the second quarter, down 24 percent the second quarter of 2007. The total for the second quarter is 19 percent lower than the five-year average for that period.
Blow molding machines. Shipments declined by four units for the second quarter, to 21 units. The five-year average for blow molding machines shipped in the second quarter is 26 units.
Components — screws and barrels. This segment covers components for injection molding and extrusion. The total segment reported second-quarter shipments of 3,952 units, a drop of 5 percent from the year-ago second quarter. But it is higher than the first-quarter 2008 shipments because of growth so far in screws and barrels for injection molding.
Shipments for extrusion-related components were down from the first quarter.
Auxiliary equipment. SPI said demand for auxiliaries has been very steady during the past six to eight quarters.
In the second quarter, new bookings totaled $78.9 million, down 3 percent from the second quarter of 2007, and 5 percent lower than the first quarter of 2008.