The value of plastics machinery shipped by North American suppliers registered a solid rise in the second quarter of 2015, according to statistics compiled and reported by SPI: The Plastics Industry Trade Association’s Committee on Equipment Statistics (CES).
Shipments of primary plastics equipment (injection molding, single-screw extrusion, twin-screw extrusion, and blow molding equipment) for reporting companies totaled $303.5 million in Q2. This was an increase of 5.5% from the shipments total of $287.7 million in Q1, and it was a gain of 6.7% when compared with the shipments total from same quarter of a year ago. For the year to date, the value of primary plastics equipment shipments is up 3.9% over last year.
A breakout of the CES data shows that the shipments value of injection molding machinery escalated 3.9% in Q2 when compared with same quarter from last year. The shipments value of single-screw extruders slipped 1.5% from last year. The value of shipments of twin-screw extruders (includes both co-rotating and counter-rotating machines) eked out a gain of 1% in Q2. The Q2 shipments value of blow molding machines jumped 66.4%.
The CES also compiles data on the auxiliary equipment segment (robotics, temperature control, materials handling, etc) of the plastics machinery industry. New bookings of auxiliary equipment for reporting companies totaled $121.4 million dollars in Q2. This was a jump of 12.4% when compared with the total from Q2 of last year.
The growth in the CES data on plastics machinery shipments was moderately slower than the year-over-year increase of 5.5% (seasonally adjusted, annualized rate) in total business investment in industrial equipment (plastics machinery is a subset of this data) compiled and reported by the federal Bureau of Economic Analysis as part of its quarterly GDP data release.
The Q2 gain in the CES shipments data was moderately stronger than the other major industrial machinery market indicator, compiled and reported monthly by the Census Bureau, which showed that the total value of shipments of industrial machinery increased by 2.4% in Q2 when compared with the year before (plastics machinery shipments are also a subset of this data).
"Despite the volatility in the stock market in recent weeks, the underlying fundamentals indicate that the recovery in the US economy is still intact. The plastics industry has been a growth leader for the US manufacturing sector throughout the recovery, and this will continue through the foreseeable future," said Bill Wood, the economic analyst who reports on the plastics machinery markets for the CES. "Consumer confidence is rising, residential construction activity is accelerating, and stronger economic growth is expected for the rest of the year. Overall, we are reaping the benefits of low interest rates, low energy prices, and rising household incomes resulting from stronger employment levels. This is more than enough to offset the drag caused by weakness in the oil patch, a stronger dollar, and slower export demand."
The CES also conducts a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future. The responses from the Q2 survey indicate that machinery suppliers remain optimistic about the market demand for their products in the coming months. Both in the coming quarter and during the next 12 months, 88% of the respondents expect conditions to either improve or hold steady. Quoting activity was higher in the second quarter for half of the survey participants.
North America and Mexico are the regions where the most promising market conditions for machinery suppliers are expected in the coming year. Expectations for Latin America are for mostly steady market conditions, while the outlook for Europe and Asia are steady to weaker.
When asked about their expectations for the major end-markets, the Q2 respondents indicated that automotive and packaging will remain strong in terms of demand. Expectations for all other major end-markets call for firm market conditions to persist during the next 12 months.
Bill Wood of Mountaintop Economics & Research, Inc., a supplier of industrial market analyses and forecasts for decision makers in the plastics Industry, conducted the survey and analysis.