Final-year numbers from the Society of the Plastics Industry Inc. confirmed it: 2009 was a bleak year for plastics machinery.
U.S. shipments of injection molding presses crashed to 1,285 units, a 47 percent drop from 2,444 units in 2008.
The SPI machinery statistics reflect the severe recession.
There was many a time when one of the biggest injection molding guys would do that much in a year, and now that's where the market is, total, said economist Bill Wood.
Injection molding machines represent the biggest sector of plastics equipment. U.S. injection press shipments fell through the 3,000-unit threshold in 2007, then dropped below 2,500 in 2008.
But Wood thinks the industry has finally reached the floor with the 2009 number of 1,285 units.
I would say that's definitely a low-water mark. I think that will be a record low for some time to come, said Wood, who runs Mountaintop Economics & Research Inc. of Greenfield, Mass. For 2010, he is predicting 1,600-1,800 units, which would be about a 30 percent increase from the dismal 2009 figure.
Percentage-wise, it is a good increase, but remember just a few years ago, 3,000 was considered a catastrophe, he said. The industry like the overall U.S. economy has begun a slow trudge upward, from what he called an all-out panic year in 2009.
Extruders fared better than injection presses, down just 15 percent. SPI reported 711 extruders were shipped in 2009, vs. 836 the year before. Wood said film and sheet packaging is buoying extruder sales. But the weak construction sector a key extrusion market for pipe, siding and windows means extrusion is going to stay down longer than other types of machinery, he said.
Auxiliary equipment mirrored the injection press falloff. SPI reported auxiliary makers had net bookings of $149 million in equipment in 2009, down 49 percent from 2008's $292 million.
SPI said data for blow molding machines was incomplete. The Washington-based trade association did not release 2009 numbers for screws and barrels. SPI's Committee on Equipment Statistics compiles the data.
One bright spot is capacity utilization at U.S. plastics and rubber factories, which had rebounded to the mid-70 percent range so far this year. In 2009, capacity utilization stayed around mid-60 percent for most of the year. That means plastics processors are restarting machinery that had been sitting idle.
A key index from the Institute for Supply Management shows the manufacturing sector grew for the 10th consecutive month in May, when the Purchasing Managers Index was 50.7 percent. A reading over 50 percent shows manufacturing is expanding.
Wood said people and businesses tend to overreact during economic recessions.
Last year was very clearly an overly negative reaction. But then this year, it kind-of bounces back to where it should be, he said.
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