North American plastics machinery shipments dropped 16.2 percent in the fourth quarter compared with the same period a year ago, according to the Plastics Industry Association.
The dollar value of North American plastics machinery shipments actually ticked up in the fourth quarter of 2019 compared to the third quarter, led by injection molding machines.
The Washington trade group's preliminary estimate puts the value of shipments from reporting companies at $316 million in the fourth quarter, which is a 7.7 increase from the third quarter. Injection presses rose 9.6 percent, but the value of single- and twin-screw extruders fell by 0.9 percent and 7.7 percent respectively.
When the fourth quarter of 2019 is measured against the fourth quarter of 2018, the value of injection presses decreased by 14.9 percent. Twin-screw extruders fell significantly by 35.2 percent. Single-screw extruders declined 12.3 percent from the year-ago fourth quarter.
"The fourth-quarter numbers confirm weaker 2019 plastics machinery shipments compared to 2018," said Perc Pineda, chief economist at the Plastics Industry Association. "Weaker business investment spending in 2019 due to uncertainties from trade and tariffs and overall weaker manufacturing activity explains the low numbers of plastics machinery shipments."
Pineda said the trade association's projection of 2.3 percent U.S. GDP growth for 2019 was correct, based in advanced estimates from the U.S. Bureau of Economic Analysis.
"We expect another year of moderate U.S. economic growth. However, if business confidence turns optimistic this year now that there have been positive developments on trade and tariffs, and interest rates are expected to stay low, we could see better numbers for plastics machinery shipments," Pineda said.
The association's Committee on Equipment Statistics released the numbers Feb. 20.
A CES quarterly survey shows that machinery suppliers are becoming more optimistic. In the coming quarter, 69.4 percent of respondents expect conditions to either improve or hold steady — a reversal of the 39 percent that felt that way in the previous quarter. For the next 12 months, 73.5 percent expect market conditions to be steady-to-better, which is up from 63 percent in the previous quarter's survey.
The Plastics Industry Association said trade and tariff issues hurt the machinery business in 2019. Exports of plastics machinery totaled $352.8 million in the fourth quarter, down 6.8 percent from the third quarter.
Mexico, Canada and Germany remain the largest U.S. export markets, combining for $157 million of fourth-quarter machinery exports. China, the fourth-largest export market, totaled $22.7 million.
Imports of plastics machinery fell 5.4 percent. Lower exports and imports have caused the plastics machinery trade deficit to decrease by 4.2 percent from the third quarter, the trade association reported.