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About the Survey:

Providers of plastics processing technology need little additional evidence to confirm how
difficult the North American market has been for their products so far this year. However, we have heard anecdotally that, while capital spending is largely on hold due to current economic conditions, engineering and quoting activity has remained surprisingly high and many end user manufacturing companies are still relatively busy. This survey, held in April, was conducted to validate that contention and to measure more specifically how the recession is affecting plastics processors’ investment plans. The survey questionnaire was posted online and publicized via
e-mailings to lists provided by Plastics Technology Magazine, Townsend Solutions, and the Society of the Plastics Industry (SPI). The survey generated 490 responses from plastics processors.  

Summary:

While the survey certainly confirms broad concern over the recession, it nonetheless paints a more positive picture than some might guess. For example, over a third of respondents said their company’s business is stable or growing, and another 31 percent said business is only “slightly declining.” Over 17 percent are currently in process of purchasing capital equipment or actively researching for later purchase. Another 26 percent are considering future purchases. More than 9 percent have already purchased this year.

But a strong majority is taking a wait-and-see position before releasing funds. While a quarter of companies said the recession has not affected their equipment purchasing plans, half said they have delayed plans because of it. Only 12.2 percent said they have canceled planned purchases so far. As for why they are delaying plans, 13.7 percent said business is still good but they are uncertain about the future. But over 60 percent said they are reducing spending because of business declines. Of those delaying purchases, over 17 percent said they will follow through as soon as they regain confidence in the general economy, and 60 percent said they will follow through as soon as business improves.

Surprisingly, only 5 percent said they are canceling or delaying purchases due to difficultly in finding financing, which appears at odds with what we have heard from a variety of equipment vendors. The low number may be explained by the fact that many shops delaying purchases have not yet sought financing.

Of those planning to purchase, nearly 18 percent expect to purchase in the next three months, a third in the next 4-6 months, and over half in the next 7-12 months. Nearly 43 percent of this group said they will buy new auxiliary equipment and another 33 percent will buy new primary processing equipment. Over 46 percent said they will buy molds and tooling.

These manufacturers have been very aggressive in their efforts to reduce costs, but it hasn’t just been about cutting. More that half said they have improved processes to reduce cost and 20 percent have increased automation. But they have cut a lot too with 60 percent saying they have reduced staff and 57 percent have reduced employee hours. Nearly 38 percent have found cheaper material sources and more than a quarter have demanded and received price reductions from existing suppliers. Only 7 percent said they have done nothing to reduce costs.

The survey also asked processors planning to buy what information sources they use to help research their purchases. The answer was an interesting mix of tried-and-true preferences along with new media options. The number one information source continues to be supplier sales people (68.3%), followed by supplier web sites (54.4%), trade shows and seminars (48.7%), trade magazines (43.6%), industry web sites (39.7%), search engines (32.7%), e-mail newsletters (13.7%) and online “webinars” (5.4%).

Perhaps the combination of preference for sales people and trade shows as information sources accounts for the surprisingly high number of people indicating they will go to NPE this year. Nearly 44 percent confirmed they will attend the show, and another 30 percent are still undecided. Only 9.6 percent said they will not attend do to economic conditions.