North American Plastics Machinery Shipments Contract Again

The shrinking figure marked the second consecutive quarterly contraction in the market on a year-over-basis, and the first back-to-back corrections for North American plastics equipment since the sector’s recovery began in 2010.

Relative to recent performance, however, the final quarter of 2016 was strong. Going back to 2007, the $361.7 million worth of equipment shipped by reporting companies in the fourth quarter was only topped by $390.6 million delivered in the fourth quarter of 2015. Compared to the third quarter of 2016, the final three months of the year were up 24.2 percent to the $291.3 million generated from July through September. For the full year, equipment shipments were up 1.2 percent in 2016 compared to 2015, which was an NPE year.  

Performance By Process
Preliminary estimate for shipments of primary plastics equipment (shipments value):

• Injection Molding Machinery: Down 12.1 percent.
• Single-Screw Extruders: Down 9.2 percent.
• Twin-Screw Extruders: Down 8.1 percent.
• Blow Molding Machines: Up 9.1 percent.

The $126.6 million dollars of new bookings for auxiliary equipment by reporting companies was just 0.1 percent off from the fourth quarter of 2015, but it marked a gain of 5.0 percent compared to the third quarter total.

Contraction Across Manufacturing
The total value for new orders of U.S. industrial machinery fell 1.6 percent in fourth of 2016, when compared to the final three months of 2015, according to Census Bureau data. For all of 2016, total new orders for industrial machinery increased by 0.6 percent.

Business investment in industrial equipment increased 2.6 percent (seasonally-adjusted, annualized rate) in Q4 of 2016 when compared with Q4 of 2015, according to the Bureau of Economic Analysis (BEA). For the full year, business equipment investment rose 2.9 percent.

Outlook
In its quarterly survey of plastics machinery suppliers, the Plastics Industry Association reported that 91 percent of respondents expect market conditions to either hold steady or get better during the next year; up from 86 percent in the previous quarter.

Geographically, North America was the region with the strongest expectations for improvement in the coming year. Mexico is expected to be steady-to-better, while the outlooks for Asia and Latin America continue to be more optimistic than they were in the previous quarter. The outlook for Europe weakened modestly, however.

The respondents expect the medical and packaging end-markets to experience the best growth in the coming year. Expectations for automotive demand improved after a sharp dip in the previous quarter. The outlook for all other end-markets forecast steady-to-better demand in 2017.