North American shipments of plastics machinery registered a strong year-over-year increase in Q1 of 2016.
For the second straight quarter, North American shipments of plastics machinery registered a strong year-over-year increase in Q1 of 2016 according to statistics compiled and reported by the SPI: The Plastics Industry Trade Association’s Committee on Equipment Statistics (CES).
Shipments of primary plastics equipment (injection molding, extrusion, and blow molding equipment) for reporting companies totaled $330.5 million in the first quarter. This was 13.5 percent higher than the total of $291.2 million in Q1 of 2015. This total was 15.4 percent less than the $390.6 million from Q4 of 2015; however, this data is not seasonally adjusted and the fourth quarter is typically the strongest quarter of the year.
“This year got off to a good start. There has been a strong upward trend in the machinery data since the recession hit bottom in 2009, but this trend hit a plateau during the first three quarters of 2015. It re-emerged in the fourth quarter of last year, and the momentum was sustained in the first quarter of this year,” according to Bill Wood, of Mountaintop Economics & Research, Inc. Wood is the plastics market economist who analyzes and reports on the plastics machinery market for the CES.
PRIMARY PLASTICS EQUIPMENT SHIPMENTS
When this data is broken out by reporting sector, there was wide variance in the quarterly totals. The shipments value of injection molding machinery jumped 25.2 percent in Q1 of this year when compared with the total from Q1 of 2015. The shipments value of single-screw extruders decreased 17.4 percent in Q1 when compared with Q1 of 2015. The shipments value of twin-screw extruders (which includes both co-rotating and counter-rotating machines) escalated 6.8 percent in Q1 when compared with the same quarter last year. The shipments value of blow molding machines dropped 63.5 percent in Q1when compared with Q1 of 2015.
New bookings of auxiliary equipment for reporting companies totaled $120.1 million dollars in Q1 of 2016. This represented a jump of 13.6 percent over the total from Q1 of 2015, and it was a decline of only 5.2 percent when compared with the seasonally-strong total from Q4 of last year.
The trend upward in the CES data corresponds with the long-term trends in the two major data series compiled by the U.S. government that measure overall demand for industrial machinery. According to the Bureau of Economic Analysis, business investment in industrial equipment escalated 6.3 percent (seasonally-adjusted, annualized rate) in Q1 of 2016 when compared with Q1 of 2015. This follows a gain of 6.5 percent in the fourth quarter of last year.
According to data compiled by the Census Bureau, the total value for new orders of industrial machinery jumped 21.0 percent in Q1 of 2016 when compared with the total from Q1 of 2015. This gain followed a rise of 12.1 percent in Q4 of 2015.
"After a sluggish start to the year, the recovery in the US economy will gain momentum as 2016 progresses. This will spur rising consumer demand for plastics products. On a macroeconomic level, interest rates are expected to increase gradually in the coming months, and there will likely be a moderate rise in the price of energy products. But these two trends will be mitigated by a rise in wages and household incomes resulting from stronger employment levels," said Wood.
The CES also conducts a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future. According to the Q1 survey, 84 percent of respondents expect market conditions to either hold steady or get better during the next 12 months. This is a small improvement in expectations from the previous quarter.
The outlook for global market conditions also improved in the first quarter. North America is now expected to have the fastest market growth in the coming months, but the outlook for Mexico is also strong. The outlooks for Asia, Europe, and Latin America improved in the first quarter when compared with previous quarters, though they remain well below the levels expected for North America and Mexico.
As for the major end-markets, the respondents to the Q1 survey expect that medical, autos, and packaging will enjoy the strongest growth in demand for plastics products and equipment this year. Expectations for all other end-markets call for steady-to-better demand to prevail in 2016.
The industry and survey analysis that appears in this media report was contributed by Bill Wood of Mountaintop Economics & Research, Inc., a supplier of market analyses and forecasts for decision makers in the plastics Industry. Mr. Wood is a plastics market economist with more than 28 years of experience in industrial market analysis and forecasting. (email@example.com)
The SPI Committee on Equipment Statistics (CES) collects monthly orders and shipments data from manufacturers of plastic injection molding, extrusion, blow molding, hot runners and auxiliary equipment. A confidential, third-party fiduciary, Vault Consulting, LLC, compiles the monthly data and analyzes individual company data for consistency and accuracy. Once this crucial process is completed, Vault aggregates and disseminates reports to participating companies. If this is something you and your company are interested in please contact Katie Masterson at firstname.lastname@example.org or 202-974-5296.
Founded in 1937, SPI: The Plastics Industry Trade Association promotes growth in the $427 billion U.S. plastics industry. Representing nearly one million American workers in the third largest U.S. manufacturing industry, SPI delivers legislative and regulatory advocacy, market research, industry promotion and the fostering of business relationships and zero waste strategies. SPI also owns and produces the international NPE trade show. All profits from NPE are reinvested into SPI’s industry services. Find SPI online at www.plasticsindustry.org and www.inthehopper.org.