When the U.S. Federal Reserve meets today, the general expectation is that there will be another slight increase in interest rates.
Expect that to mean slowing sales for plastics machinery and other big-ticket items, Bill Wood, Plastics News' economics editor, noted during the July 25 Numbers That Matter Live webinar. As a result, he doesn't expect to see big growth for equipment makers for three or four quarters, with the potential for a boost out of NPE2024 when buyers "have a chance to kick the tires" on new machinery.
"With rising interest rates and declining utilization rates, we've got a few quarters of tough sledding for machinery manufacturers," he said.
In this month's Number That Matter column, Wood noted that production numbers have stalled for plastics overall, and the industry as a whole has not kept up with the rate of inflation. Those numbers vary, of course, depending on the end market. And the economy is generally "holding up better than people anticipated." But there are still big issues to watch when tracking expectations.
"Right now, the plastics industry is only producing about the same amount of product as it did six years ago," he said.