Cleveland — Economist Peter Mooney said rotational molders have grown faster than the overall durable goods sector for the past 20 years — by getting into markets and being “nimble and entrepreneurial.”
Mooney delivered results of his latest economic report on rotomolding on as the keynote speaker to kick off the Society of Plastics Engineers Rotational Molding Conference, held June 5-8 in Cleveland.
Money said that, from 1994 through 2014, the rate of U.S. rotomolding sales have grown average of 5.4 percent a year. The overall U.S. durable goods sector has tallied annual growth of 3.7 percent. Categories of durable goods include appliances, automotive, building, furniture, marine, material handling and recreational vehicles.
Economic challenges lie ahead, as economic growth remains tepid, Mooney said, projected at less than 2 percent this year. And although since the Great Recession of 2009, all sectors have rebounded, except for marine — the volume production of all major durable goods in the United States has yet to return to the levels of 2005, he said.
Most rotomolders enjoy the strengths of inventive, family-owned businesses, according to Mooney. They can adapt quickly. “The overall trend is clearly one of increased market diversity,” he said.
“Back in 1994, toys and playground equipment constituted 44 percent of the industry's sales. Today, agricultural and industrial tanks dominate with 25 percent of total sales,” he said. “Beyond tanks, rotomolders have been entrepreneurial, developing their own proprietary products and penetration applications that were previously the preserve of blow molders, composites processors, injection molders and thermoformers.”
North American rotational molding was a $3.6 billion business in 2014, but it just a tiny sliver of the total plastics industry — just 1.3 percent.
But that macro-plastics view includes areas where rotomolding does not compete, such as film and sheet, pipe and tubing. So when he studies how rotomolding fits, Mooney looks to markets for durable, structural parts.
According to figures compiled by Mooney's firm, Plastics Custom Research Services of Advance, N.C., in 2011, rotomolding held 5 percent of the share of processes used to make structural plastic parts, above industrial thermoformers, at 4.5 percent. (Injection molding was the largest, at 72 percent, followed by composites processing at 12 percent, and industrial blow molders at 6.5 percent.)
“Your challenge is to raise that share from 5 percent to 6 percent or more,” Mooney told attendees at SPE's Cleveland rotomolding conference. He is secretary of the Rotational Molding Division.
The fact that rotomolders now are “far more diversified” than in the past means that the industry has remained healthy during ups and downs of the economy, Mooney said. His report shows a growth rate of more than 25 percent in the rate of market participation, from 1995-2015, in five key rotomolding markets: tanks, recreation and sporting goods, industrial products, consumer products and lawn and garden products.
Mooney said the U.S. economy continued its very slow growth in the first quarter of 2016. Durable goods were the only bright spot, growing at 5.6 percent in the first quarter. Normally that would be good news for rotomolding, but Mooney said most of the solid gains are coming from automotive — and that's not a big rotomolding market.
“So if you have some OEMs and aftermarket automotive customers, you're in pretty good shape. Other than that, it doesn't look yet as if happy days are here again,” Mooney said.