Injection molding machinery sales are down in 2023 — cut in half for some — as excess capacity from the pandemic is put to new uses while higher interest rates have delayed some investments.
This year has been significantly slower than 2021 or 2022, according to Martin Baumann, CEO at Rocky Hill, Conn.-based Arburg Inc.
"The COVID-buying binge came to an end. A good number of customers have standard machines on hand or not fully utilized. For that reason, we have seen less movement in standard machines in 2023, although investment in specialized projects and turnkey systems continues," Baumann said. "It should not have come as a surprise that, after two years of record orders, the overall market is taking a bit of a break."
In addition to special projects, trends like reshoring and improving local supply chains give Baumann optimism.
Vanessa Malena, president of Engel North America in York, Pa., agreed.
"Like everybody else in the industry, we see some slowdown overall, but there are also small increases," she said. "Some projects take longer and some decisions are pushed out, but business activity exists. We are encouraged by the trust that business partners put in us. The fact that we could grow our customer base in a challenging market proves we are focusing on the right things."
At Boy Machines Inc. in Exton, Pa., President Marko Koorneef said business has been down 50 percent so far this year but he expects a pickup in the near term.
"The fourth quarter looks to be a good quarter for us," Koorneef said.
Len Hampton, national sales manager at Plustech Inc., the North American base of Sodick Co. Ltd.'s injection molding machinery division, said, "The industry as a whole is down near 40 percent. However, being largely involved in medical devices and electronics has let us see growth in these industries."
Meanwhile, markets for many home goods and yard equipment have contracted, according to Glenn Frohring, an owner of Worcester, Mass.-based Absolute Haitian, which sells injection molding machines made by Haitian Plastics Machinery Ltd. not only in China but also now Mexico and soon Serbia.
Frohring noted that during the pandemic, many people began working from home and used their commuter time — and time for other things like dining out and going to the movies — to clean attics and work in their yards.
"They bought a lot of household goods like storage bins and lawn and garden equipment," Frohring said. "That market was overserved and now the warehouses are full of excess stuff. Our customers are working off inventory slowly but surely."
2023 has been a bumpy year, he added, describing the first three quarters as bad, better and good.
"The first quarter was very slow, and our third quarter was the best," Frohring said.
On the flip side, at Yizumi-HPM Corp. in Iberia, Ohio, Joe Liang, sales director for North America, said sales are up.
"We had a significant increase in sales by 85.9 percent in the first quarter due to some backlog orders from 2022 that were shipped in Q1," he said. "Then we had a very low 7.2 percent increase in Q2 due to the global economic issues. In Q3, we were then back to an increase at 24.5 percent compared to the same period in 2022."
At Sumitomo (SHI) Demag Plastics Machinery, Steven Ross, senior manager of strategic sales and marketing, said a big decline in 2022 leveled out and was fairly flat the first half of the year.
"In late Q2, we did see a bit of an uptick. Fortunately, we experienced a 60 percent increase in the second half of 2023, with continued improvement expected to continue into 2024," Ross said.
Dale Bartholomew, national technical manager for Japan Steel Works America Inc., in Ontario, Calif., described 2023 as "a challenging year with limited growth" due to excess capacity following the big buildup in late 2021 and early 2022.
At Billion Plastics Machinery Inc. in Rochester Hills, Mich., North American Sales Manager Georg Kiesl said the U.S. market retained its positive sales growth trajectory for the machine builder, although demand slowed particularly in the small-tonnage segment.
Meanwhile, at Wittmann USA Inc., in Torrington, Conn., President David Preusse said new orders across product sectors are down 8-15 percent, but a strong backlog has boosted projected year-end shipment revenues to a new record high.
"Our backlog continued to shrink, but an uptick this summer began to increase our backlog again. The particularly healthy lines currently are robots, automation and central material handling systems," Preusse said.
At Batesville, Ind.-based Hillenbrand Inc., sales for the Molding Technology Solutions (MTS) business unit, which includes plastics machinery manufacturer Milacron, dropped 10 percent to $247 million year over year due to lower volume for injection molding and hot-runner equipment.
"While the pipeline of customer inquiries and projects remains solid across our key product categories, the global economic and geopolitical environment continues to pose a challenge to the timing of some customer decisions, and we are entering the year with lower organic backlog levels compared to the record levels we saw entering fiscal 2023," President and CEO Kim Ryan said in a Nov. 16 quarterly call.
On an organic basis, the backlog decreased 9 percent "due to lower orders for large plastic systems, primarily resulting from the continued customer decision delays on several large projects," she added.