Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Reuters Responsible Business Europe 2022
    • Reifenhäuser Technologies Livestreams
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. Viewpoint
Viewpoint
December 05, 2017 01:00 AM

Tax reform could supercharge machinery sales

Plastics News Report
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    This week, Plastics News features the Machinery Outlook package, and this year it rolls out against a dramatic backdrop: President Donald Trump's tax reform plan.

    As we finished production of the issue, the Senate was set to vote on the U.S. tax overhaul. The Senate tax bill would cut the corporate tax rate to 20 percent from 35 percent, starting in 2019.

    Some processors are likely to use the windfall to buy equipment, both to add new capacity and replace older machines. The replacement angle is significant, as U.S. plastics processors still have plenty of older, inefficient injection molding presses, blow molders and extruders.

    And, in an era when finding and retaining skilled manufacturing workers is such a pressing issue, pay raises to key employees should be in order.

    But the tax reform's proposed 100 percent deprecation for capital spending is what could really supercharge machinery sales, and it could go into effect next year.

    Fourth-quarter machinery business currently gets a boost from the 50 percent "bonus depreciation," which has been used to stimulate the economy. Think what an immediate 100 percent tax write-off would do. As Niigata sales executive Peter Gardner said, it "should spur incredible investments in replacement and new capacity in the United States."

    Of course, as these words are being written, tax reform still had not become law. But all signs were pointing toward that happening.

    Even without tax reform, the U.S. machinery sector has been relatively healthy. Plastics News reporters Bill Bregar and Audrey LaForest talked to more than 35 executives at machinery companies. The bellwether injection press business has tallied U.S. shipments of around 4,000 units for three years in a row now. Large machines are selling well, industry leaders said, crediting the resilient automotive market and renewed areas like appliances.

    Processors are looking for new technology to reduce costs and make more advanced goods than ever before, using multi-shot molding, barrier layers and in-mold assembly. Machine controls get better all the time, and now Industry 4.0 promises a fully connected future. All that, combined with tax reform, could make NPE2018 a very dynamic environment where machines get sold, not just admired by the tire-kickers.

    The U.S. economy seems to be on solid ground. And, importantly, growth is happening around the world. A synchronized global economic recovery doesn't happen very often. But this one is powering stock markets in many countries to new heights.

    "Now we're entering the new year with more momentum," Plastics News economist Bill Wood said in the outlook story on injection molding machines.

    Some potential roadblocks remain. Automotive sales could end a long streak of record years ,and sales may slack off.

    The North American Free Trade Agreement is getting renegotiated. No one knows what will happen. It seems impossible that the U.S. could pull out of NAFTA, but there are no absolute certainties with President Trump.

    New home construction, which stimulates siding, windows, pipe and other plastic construction products, faces some possible headwinds. The Republican-led tax reform could end the deduction for state and local taxes, which would hit potential homebuyers in high-tax states. The proposal to cut the cap on mortgage interest deductions will reduce that tax incentive for homebuyers in expensive markets.

    But the U.S. economy has always faced these wild cards. And after the last major downturn, the Great Recession, now nearly 10 years ago, plastics machinery bounced back sharply.

    Plastics remains a growth market. Plastics continue to replace traditional materials — witness not one but two see-through plastic food cans: the Klear Can from Milacron Holdings Corp. and TruVue made by Sonoco Products Co.

    Innovative people, companies and machinery are the heart of the plastics industry — the vital ingredients that keep it strong. That won't change as we move into 2018.

    RECOMMENDED FOR YOU
    Peek behind the data shows how top injection molders grew in 2021
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Rhode Island kills chemical recycling bill, ACC cites 'misinformation'
    2
    Invista upgrading nylon 6/6 production in South Carolina
    3
    Canada moves to ban single-use plastics, limit chasing arrows symbol
    4
    Rotomolder Centro invests $6M in new Iowa facility
    5
    Peek behind the data shows how top injection molders grew in 2021
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Reuters Responsible Business Europe 2022
        • Reifenhäuser Technologies Livestreams
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified