SPI reports moderate growth in US machinery sales

WASHINGTON — Shipments of plastics machinery posted a moderate year-over-year gain in the first-quarter, even as the U.S. economy had a sluggish start to 2015, according to the Society of the Plastics Industry Inc.

The value of U.S. shipments of primary plastics machinery — injection molding, extrusion and blow molding machinery — totaled $293.6 million in the first quarter of 2015, a gain of 2.9 percent when compared to the same quarter a year ago. The first-quarter shipments were down 15.2 percent from $346.1 million in the fourth quarter, historically the strongest three-month period for machinery.

SPI called it an ongoing machinery uptrend, as primary equipment shipments increased 7.6 percent for the full year of 2014.

SPI's Committee on Equipment Statistics released the first quarter numbers on June 17.

Plastics economist Bill Wood thinks the second half also will be strong. He analyzes and reports on the machinery sector for the CES.

“Yet again, the quarterly CES shipments data posted a year-over-year gain. This is particularly encouraging in light of the slower-than-expected growth in the U.S. economy to start the year,” Wood said. “The U.S. economy will build momentum in the second half of 2015, and the market conditions that favor business investment in new equipment — low interest rates and rising aggregate demand—will continue to prevail.”

Big jump in blow molding equipment

The value of shipments of injection molding presses grew 1.4 percent what compared with the first quarter of 2014. Single-screw extruders increased 8.4 percent on a year-ago basis. Twin-screw extruders — a category that covers both co-rotating and counter-rotating machines — gained less than 1 percent. But blow molding machine shipments jumped by 19.4 percent

CES reports that auxiliary equipment had new bookings of $105.4 million in the first quarter, an increase of 6.9 percent from the same quarter last year.

Wood said the growth in the plastics machinery data was only moderately slower than government-reported gains in demand for industrial machinery — which said overall machinery increased by 6 percent in the first quarter over the year-ago quarter.

And the quarterly CES survey shows that plastics machinery officials are optimistic. For the second quarter, 98 percent of the respondents expect conditions to either improve or hold steady — and 96 percent feel that way for the next 12 months. They expect automotive and packaging will remain strong markets for plastics products and equipment. All other major end-markets should remain firm.

Wood said conditions are good for a solid economy.

“It is particularly encouraging that the data from the entire plastics industry held up quite well in Q1,” Wood said in the report. “The macro-indicators from the first quarter indicate that the rate of growth in the U.S. GDP data may have been negative. The good news is that consumer confidence levels are holding up, and accelerating economic growth is expected for the rest of the year. The three main trends that will drive both economic growth and demand for plastics products persist. They are: low interest rates, low energy prices and rising wages and household incomes resulting from stronger employment levels.”

SPI is based in Washington. Wood runs Mountaintop Economics & Research Inc. in Greenfield, Mass., and he also is Plastics News' economics editor.