Injection molding machine shipments declined again in the third quarter of 2023, experiencing a 2.3 percent decrease between quarters and an 8 percent year-over-year drop.
Meanwhile, single-screw extruder shipments surged with a 30.5 percent increase in quarter-over-quarter comparisons and a substantial 75.3 percent increase year-over-year. Twin-screw extruder shipments demonstrated a robust 30.3 percent quarterly increase, though with a more moderate 2.9 percent year-over-year increase.
The data on North American plastics machinery sales come from the Plastics Industry Association, a Washington-based trade group that released a report for the third quarter of 2023 from its Committee on Equipment Statistics' (CES) that is authored by Chief Economist Perc Pineda.
Initial estimates for the third quarter of 2023 put the shipment value at $345.8 million, marking a 1.5 percent decrease from the revised figure of $351 million in the previous quarter.
Compared with the same period last year, there's been a 2.3 percent decrease in the value of shipments.
Bill Wood, Plastics News economics editor, said not knowing anything behind the numbers, like sample sizes, makes it hard to comment on the data, but the chart seems telling.
"We can tell the shipments have been relatively steady and stable for the first three quarters. There hasn't been much variation from one quarter to the next," Wood said. "While they have been steady this year through the first three quarters, clearly they're down on a year-to-year basis. I think the indicator of that is the injection molding numbers."
For the extrusion numbers, Wood said the data set is too small and the numbers are too volatile to read much into them quarter to quarter.
"But the injection molding data they have is a robust data set and a very good indicator of the trend in demand for machinery," Wood added.
As for the fourth quarter, which is usually the biggest quarter for shipments, Wood expects it to be up compared with the third quarter but down compared with a year ago.
"Demand isn't as robust this year and we're at a point in the calendar and overall cycle when demand for all types of products is really starting to decelerate if not decline outright," Wood said. "We have reason to believe fourth-quarter shipments will be down compared to last year. I'd also say that doesn't bode well for the first quarter. The next two quarters will be very telling. I'm anticipating declines in both quarters."
Then, comes NPE2024, a long-awaited triennial plastics industry trade show not held because of the pandemic since 2018.
"NPE traditionally boosts numbers," Wood said, "but we won't know if those machines going out the second or third quarter."
CES also released the most recent quarterly survey of plastics machinery suppliers to gauge their outlook on market conditions and equipment expectations. The results indicated a rise in participants anticipating an improvement in market conditions over the next 12 months compared to the previous year. The percentage of those expecting conditions to either remain the same or improve rose to 56.1 percent.
Wood sees the survey results another way.
"Roughly half the machinery suppliers expect conditions to be worse," Wood said. "I think that could be the case. I don't think demand for machinery will pick up dramatically in the next 12 months."
CES also reported that in the third quarter, U.S. exports of plastics equipment totaled $270.9 million — an increase of 7.2 percent from the previous quarter and a whopping 36.3 percent from the prior year.
More than half of these exports, about 55.4 percent worth $150.1 million, were directed to Mexico and Canada.
Meanwhile, imports decreased 16.5 percent from the previous quarter and 9.5 percent from a year earlier. This shift led to a significant 45.5 percent decrease in the plastics equipment trade deficit, which reached $112.1 million.
The trajectory of plastics machinery will continue to be influenced by the prevailing high-interest rate environment, according to Pineda.
"Despite the resilience displayed by the U.S. economic output, primarily propelled by robust consumer engagement, the economy's transition toward a consistent output growth and a stable inflation rate has been somewhat delayed. While the demand for plastics is anticipated to remain steady, fluctuations in manufacturing could impact business investment decisions," Pineda said.