In our North American processor rankings, we collect and share important data on key plastics sectors. This week, the machinery sector gets its turn. The data is clear as mud.
Senior reporter Catherine Kavanaugh contacts top executives at all the major suppliers of primary equipment. The biggest sector, injection molding machinery, gets most of the attention.
This year, she's reporting that injection press sales were down in 2023. High interest rates took a toll on new equipment sales, plus many processors that eagerly purchased new machines just after the pandemic are now dealing with excess capacity.
Plastic product demand has experienced a recession this year. Operating rates at many molders are a little too low for them to invest and modernize.
That's not universally true, obviously. The machinery executives who talked with Kavanaugh all mentioned some hot markets and encouraging trends, like reshoring.
One key part of this week's special report is our estimate of the number of injection presses shipped to U.S. processors. This year, Plastics News estimates that press shipments might not have even reached 3,000 units.
Our estimate in 2020 was 5,000 units. This year, the number may end up at about 2,975.
Clearly 2023 wasn't a good year. So, what's the outlook for 2024?
In my early days as a business reporter, one of my assignments was to write stories about monthly home sales. The data was always a few weeks old by the time we got it. I noticed that whenever the numbers were bad, the Realtors said they were already improving. When the numbers were good, they told me that they were still good. And guess what? It was always a great time to buy — or sell — a home.
I don't want to fall into that trap, but I do think that we should expect 2024 to be a better year. The automotive market plays a pretty big role in the injection molding market, and it looks likely that all the problems that sector experienced this year may be in the rearview mirror.
Home construction may also finally be ready for a rebound, assuming that interest rates settle back to normal.
There are some wild cards, including the election and NPE.
We're seeing positive signs already. Some press makers have been beefing up North American assembly and service. They're investing because they consider this a promising market that's poised for growth.
2023 was a year where economists used the word "unprecedented" a lot. I'm looking forward to a drama-free 2024, starting with a soft landing for the economy with lower inflation and more stable plastics markets.
Don Loepp is editor of Plastics News and author of the Plastics Blog.