In a sign of moderating growth in capital equipment spending, an industry report says North American plastics machinery shipments fell in the third quarter of 2016, from the third quarter a year ago — only the second time there was a year-over-year quarterly decline since the economic recovery started in 2010.
The Plastics Industry Association's Committee on Equipment Statistics reported the numbers Dec. 7. The Washington-based trade association, which changed its name from the Society of the Plastics Industry Inc. on Dec. 6, releases its machinery data in dollar value amounts.
Economist Bill Wood said the growth rate for machinery is moderating, after enjoying a solid run coming out of the Great Recession.
“Shipments of plastics equipment rose steadily during the six-year period from 2010 through 2015, but this trend hit a plateau in 2016,” said Wood, who runs Mountaintop Economics & Research Inc. “The quarterly comparison will be difficult in the fourth quarter of this year, so the annual growth rate will continue to moderate in the near-term.”
Even so, the Plastics Industry Association reports that, for the first three quarters of 2016, shipments of primary machinery are up 4.7 percent when compared with the first three quarters of 2015.
Wood said action next year in Washington, where a Republican Congress will operate with a new president, Donald Trump, could spur the capital equipment sector. “The incentives to invest in new equipment remain strong, and if Congress passes some meaningful corporate tax reform in 2017, they may even improve,” said Wood, who analyzes the machinery statistics for the association's statistics committee and is also economics editor for Plastics News.
Third-quarter shipments of primary plastics machinery — injection molding presses, extruders and blow molding machines — totaled $294.7 million, for reporting companies. That was 2.4 percent lower than the year-ago third quarter mark of $302 million, and was down 6.5 percent from the second quarter of 2016, which was $315.3 million.
The value of shipments of the key injection molding machinery segment decreased by 6 percent in the third quarter of 2016 vs. the same quarter a year ago.
The shipment value of single screw extruders declined 3.8 percent, again, when measured against the third quarter of a year ago.
Twin-screw extruders enjoyed a jump of 27.6 percent in the third quarter compared to the year-ago period. The twin-screw segment includes both co-rotating and counter-rotating extruders.