Much has been written about the U.S. economy's slow, years-long recovery from the Great Recession. It has been too prolonged, taking years longer than after past downturns. Certainly, what happened in 2008-2009 was devastating, so it's been a steep climb.
For injection molding machinery — a bellwether of the entire plastics industry — U.S. shipments went into a free fall, ending 2009 at 1,285. Then press sales began to come back steadily. Well this year, they probably will break 4,000.
And now it looks like business in 2016 will moderate for injection presses, as well as some other segments of the plastics processing equipment industry, when it comes to the U.S. market.
Talking about a fairly flat year coming up normally would earn a person who deals in capital machinery a starring role in “Death of a Salesman.” Not now, though. Another year of 4,000 injection presses sounds pretty good, most equipment executives would say.
“As long as we achieve around 3,500 machines, it's a healthy market in the United States,” Friedrich Kanz, president of Arburg Inc., said in the front-page story of this week's Plastics News.
Kanz is one of more than 40 machinery executives interviewed by senior reporter Bill Bregar for this week's Machinery Outlook story package.
They look back and analyze 2015. But the hard part — looking ahead — is even more difficult than normal because investment on machinery looks like it could moderate in 2016. Of course, moderating at a high level is good news. If car and light truck sales moderate at 18 million next year, that's pretty positive.
The resurgent U.S. automotive industry is to injection molding machinery — and really, nearly the entire plastics machinery world — what spinach is to Popeye. Strength.
Even if auto sales happen to fall in 2016 from their lofty heights, custom injection molders and the automakers themselves are adopting new plastics processing technologies at a rapid pace. Plastics are replacing steel, or working in tandem with it on certain parts. Parts consolidating keeps moving ahead. The reason: Automakers will need to reach 54.5 miles per gallon by 2025, under the Corporate Average Fuel Economy requirements.
Another positive factor is cheap energy — and lower, more-stable resin prices — because of America's boom in shale gas and oil. Watch for even more foreign companies to set up manufacturing in the United States and Mexico.
Greenfield plants should continue to pop up in 2016. These projects generate a lot of attention, in the press and in the offices of machinery executives preparing their proposals. But some quieter trends continue, equipment officials say: General custom molders are buying machines and adding new technology, processors are setting up a regular schedule of replacing old machines with new, and proprietary molders are upgrading equipment that turns out parts only they consume, internally.
The presidential election is next November. The election, and the primaries — especially the Republican group slugfest — will suck a lot of the air out of the room.
But not the economy. And certainly not the plastics machinery industry.
No more secrets
For a newspaper, plastics machinery statistics are nonexistent. That makes it hard to report specifics, since for our annual outlook report, for several years, we have not been able to get even the key metric — the final, yearly number of U.S. shipments of injection molding machines. It's just one number.
The Society of the Plastics Industry Inc. collects the data throughout the year. We don't need all the details — which goes to machinery companies that submit the data — just the final unit amount for injection machinery. We just need the one number.
This year, most machinery executives think it will top 4,000. OK, how much of a percent gain is that over 2014? Plastics News can't really say in the story. Because of that one number.
For this year's report, Plastics News again requested the unit shipment number, in this case for 2014. SPI said no. It's a secret.
The injection molding shipment number is the key barometer for a huge chunk of the plastics industry. SPI should release that number — and return to its practice of giving out basic unit data about the other segments of plastics processing machinery.
So OK, that would be more than one number. But SPI should start by giving out the injection molding shipments each year. That information should be public.