Reports: U.S. Plastics Equipment Shipments Continue to Slip; Germany Forecasts Growth

Shipments of primary plastics equipment in the first quarter were 7.5% lower year over year, marking three straight quarters of contraction for the North American plastics machinery sector.

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The Plastics Industry Association’s Committee on Equipment Statistics (CES) reported that the preliminary estimate for shipments of primary plastics equipment—injection molding, extrusion, and blow molding machines—totaled $305.3 million in the first quarter, compared to $330.1 million in the first quarter of 2016. The total from reporting companies was 14.4% lower than the fourth quarter’s $356.7 million.

Results By Sector (year over year)

Injection molding shipments value fell 14.5%.

Single-screw extruders shipments value jumped 59.1%.

Twin-screw extruders shipments value rose 8.3%.

Blow molding machines shipments value grew 90.4%.

Auxiliary equipment new bookings climbed 11.3%.

Plastics Machinery Slips Behind U.S. Industrial Sector
The CES machinery results were a bit weaker than the overall U.S. industrial machinery sector. The total value for new orders of U.S. industrial machinery rose 4.7% percent in the first quarter of 2017 compared to the first quarter of 2016, according to data compiled by the Census Bureau. Business investment in industrial equipment rose 6.0% in the first quarter, according to the Bureau of Economic Analysis (BEA).

Outlook Remains Positive
In its quarterly survey of plastics machinery suppliers, 87% of respondents expect market conditions to either hold steady or get better during the next year. This is down slightly from 91% in the previous quarter. Respondents thought North America was still the region with the strongest expectations for improvement in the coming year, with Mexico was expected to be steady-to-better. The outlook for Latin America was more optimistic, while the expectations for Europe and Asia were lower when compared with the previous quarter.

Respondents expected packaging to be strongest end-market in the coming year, with steady expectations for automotive demand. The appliances and construction sectors are bouncing off of recent lows, and demand expectations for the industrial, medical, and electronics sectors slipped when compared with last quarter.

The View from Germany
Germany’s Plastics and Rubber Machinery Association (VDMA) announced on June 23 that it expects sales for the current year to increase by 4%, with a 3% rise forecast for 2018. In 2016, sales rose 5.1%, boosted by the K Show and a sharp increase in export sales. The VDMA reported that German output rose by 6.0% to 7.4 billion euro ($8.2 billion). Global production, meanwhile, rose 3.1% to an estimated 34.9 billion euro ($39 billion) in 2016.

After declining for three straight years, exports to China are forecast to grow in 2017 rease again in the following months. Exports to the U.S., which is the biggest sales market for German plastics and rubber machinery, remained strong in the first quarter of 2017. Strong growth was also seen in Mexico (up 58.3%) and South Korea (up 44.6%).

The VDMA noted that the effects of the U.K.’s Brexit are already apparent, with exports to Britain down 31% in the first quarter, as the market fell from Germany’s fourth largest equipment destination to No. 8. 

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