The U.S. plastics equipment market suffered an across-the-board decline in 2008 that hit all sectors: injection presses, extruders, blow molding machines, auxiliaries, and screws and barrels, according to a year-end report from the Society of the Plastics Industry Inc.
Shipments of injection molding machines had fallen below the 3,000-press threshold in 2007, to 2,862 units that year. Press shipments dropped another 15 percent in 2008, to end the year at 2,444.
Measured in dollars, $579 million worth of injection molding machines were shipped in 2008, 13 percent lower than the total for 2007, SPI said.
The continuing travails of the Detroit-based auto companies combined with the slumping U.S. economy continue to test the viability of many injection molders, said economist Bill Wood, who runs Mountaintop Economics & Research Inc. of Greenfield, Mass.
Wood said U.S. production of plastics products declined 4 percent in 2008. His forecast calls for zero growth in 2009.
But Wood said processors, over the long term, will need to increase efficiency and productivity. Resin prices and energy costs will remain flat throughout most of 2009, but the U.S. economy will not start to gain momentum until the fourth quarter of this year or the first half of 2010, he said.
All this will result in increased investment in injection molding equipment in the second half of 2010 and beyond, Wood said.
Last year, plastics machinery already was facing challenges from auctions dumping used equipment on the market, and weakness in key markets of construction and automotive. Then last fall, the economy declined sharply in the United States and around the world crimping capital investment for industrial machinery.
The fourth quarter of 2008 was especially brutal for injection presses, where shipments fell 19 percent from the fourth quarter of 2007, and auxiliaries, where bookings plunged 33 percent from the final quarter a year ago, according to the report.
SPI reports shipments of all primary plastics equipment declined for the third year in a row, falling to $792 million in 2008, down 10 percent from 2007. The total number of units shipped declined 14 percent for the year. The category of primary equipment does not include auxiliaries and screws and barrels.
Washington-based SPI's Committee on Equipment Statistics compiles the data.
Here is a look at other sectors:
Extruders For the year, SPI reported shipments of 863 extruders, down 11 percent from 2007. The category includes both single- and twin-screw extruders. Measured by dollars, the 2008 shipments were valued at $134.5 million, a 4 percent decline.
SPI said the severe recession should continue in residential construction until 2010, hurting sales of extruders into pipe, siding and windows. Retail sales should show a small gain this year, and the rebound in packaging, combined with lower resin prices, should improve profitability for processors in that segment in the latter months of 2009 and should spur investment in extruders next year and beyond, the trade association said.
Blow molding machines Shipments declined by nine units, to 90 blow molding lines in 2008. The machines were valued at $78.8 million, which was 2 percent higher than in 2007, SPI said.
Despite volatility in resin prices in recent years, overall demand for blow molded packaging is increasing over the long term. Relatively low resin prices this year should help out blow molding, SPI said.
Auxiliary equipment SPI said total bookings of auxiliaries were $292 million, down 11 percent from the 2007 level. Weak market conditions should persist through the end of this year, the report said, before a recovery for auxiliaries begins in 2010 and gains momentum in 2011.
SPI said once the recession ends, demand should increase steadily for auxiliary equipment that boosts productivity and energy efficiency, and reduces labor costs.
Components Total shipments of screws and barrels declined 12 percent in 2008, to 14,547 units. The component segment covers injection molding and extrusion. Screws and barrels were expected to decline further in the first half of 2009 and then rebound late in the year and through 2010, the report said.