For plastics machinery, 2019 will be a challenging year, especially for injection presses, the biggest equipment category and a bellwether for the overall plastics industry.
Thanks to tax reform, 2018 started with a lot of excitement in the equipment market. The big news was the immediate, 100 percent depreciation of capital investments for U.S. processors. This was supposed to spur machinery sales. Some experts even expected it to supercharge investment.
But the days of processors buying machines in a speculative fashion, for business they expect to come, seem to be over. Now processors don't order injection molding machines unless they have orders in hand. Other machinery sectors with much longer lead times, like blown film lines, are more insulated from that harsh reality.
The U.S. injection molding machine market held up in 2018, probably reaching the 4,000-unit level for shipments for a fourth year in a row, according to industry officials. Shipments probably dropped modestly, around 5 percent, they said.
But what about the coming year? The automotive sector is the wave that lifts all boats when it comes to injection molding machinery. U.S. light vehicle sales have been at 17 million units for several straight years, and that high level has sparked investment in big-ticket, large-tonnage presses. But that glory period looks to be ending, with a modest decline expected in 2019. Already, large-tonnage machine sales were down this year, several industry officials said.
Some other issues that will impact machinery sales in 2018 include: