Manufacturers of extruders report a solid 2018, as markets such as packaging, medical and construction remained steady.
On the blown film extrusion side, machinery officials say, barrier food packaging continues to drive multilayer equipment purchases, with flexible pouches continuing to replace rigid bottles and cans.
For construction, vinyl siding remained the top-selling exterior cladding for new single-family homes. But that important sector faces some question marks going into 2019: higher interest rates and rising home prices, plus weakness in both the top and bottom ends of the market. The National Association of Home Builders reported that home sales stumbled in September from interest rate hikes, even as U.S. unemployment hit a 50-year low.
Even so, single-family home sales were up at an annual rate of 3.4 percent from the year-ago period, NAHM said. More interest rates hikes could come in the new year, pushing up mortgage costs.
NAHB reports that the positive home pricing environment and good consumer confidence have kept remodeling high — also a driver of plastic building products. NAHB's Remodeling Market Index has remained above 50 since the second quarter of 2013. A rating above 50 means the majority of remodelers reported better market activity compared to the previous quarter.
For vinyl windows and siding, the overhang in extruders from earlier capacity expansions appears to be easing.
"There are some investments being made for improving efficiency," Paul Godwin, CEO of Battenfeld-Cincinnati USA in McPherson, Kan., said.
Paul Caprio, president of KraussMaffei Corp., said KM's extrusion business for windows has been solid, although he said interest rate hikes now cloud the picture for 2019. Sales of lines to extrude polyethylene pipe for the oil and natural gas sector are very strong, he said.
"Extrusion had very good year in terms of orders and sales, and it is really from across the board. Extrusion is very diversified," Caprio said.
Godwin said demand for plastic building products looks good.
"Most indicators show that the economy will remain strong through 2019," he said. The pipe market has shown the highest level of growth this year, he added.
"Spare parts activity has been strong this year, indicating good operation hours at the plant level," Godwin said.
Gina Haines, vice president and chief marketing officer at Graham Engineering Corp. in York, Pa., said the overall extrusion market was up in dollars though behind in units through October — a reverse from last year. She attributed that to "a combination of size mix and price competition."
"Medical, profile, OEM, industrial, and wire and cable are quite active," Haines said. "And the recovery in the packaging segment — particularly food, household and personal care — continues to boost the opportunities seen by our Welex sheet line and Graham Engineering extrusion blow molding product lines. Thin-gauge polypropylene applications along with PET sheet lines are drivers of much of our Welex activity."
Other machinery officials also say sheet line business continues to be a bright spot.
"Packaging remains one of our strongest focal points, and the reason being is there is such a regeneration, a renewal, of market activity … within the packaging market," said Dana Hanson, president of Processing Technologies International LLC. "We had a banner year this year in barrier sheet."
Hanson said the customers were in wait-and-see mode about the federal tax reform this year, to see how it impacted their businesses.
"I'm still optimistic that we'll see greater traction going forward as companies realize the net benefit on their balance sheets," he said. That could lead to replacement sales. "A lot of companies, a lot of folks out there, have old, tired equipment," he said.
Synthetic decking is the biggest construction market segment for PTI in Aurora, Ill.
"For us, it remains strong," Hanson said.
Sheet and hot melt extrusion have been busy sectors for Advanced Extruder Technologies Inc. in Elk Grove Village, Ill.
"We've had a very good backlog to the second quarter of next year. It's been great," President Fred Jalili said. Extrusion lines to make heavy-gauge sheet for thermoforming are keeping the company busy.
Jalili said smaller laboratory lines also are selling well.
Advanced Extruder Technologies is adding a 4,000-square-foot expansion to its plant.
"We're very optimistic for the new year," Jalili said.
R&B Plastics Machinery LLC makes single-screw extruders in Saline, Mich.
"It was a very strong year in the extrusion business," said Fred Piercy, president and general manager. "We had a great year and still have a strong outlook for 2019."
Piercy said R&B does not compete in commodity single-screw extruders but makes special control systems and integrates production lines according to a customer's application. "We're focused on providing custom solutions," he said.