Market Outlook

Mastio & Company’s most recent Injection Molding Markets Study is projecting respectable growth for injection molded packaging for 2010. This year, the North American market is projected to reach an estimated total of 8.5 billion lb of resin. With an average annual growth rate (AAGR) of 4.6%, molders interviewed for this study predicted they will be consuming 9 billion lb of resin in 2010.

Growth in this area is determined primarily by the economy, food costs, and the products being packaged. Consumer spending represents the basic source of demand. Participants in this market believe the economy is starting to improve and will increase demand for single-use, disposable packaging.

When the economy is slow, consumers have less buying power and cut back on outdoor activities and purchases. They travel less and tend to prepare more meals at home, thus increasing sales of food products packaged in consumer-sized containers. When the economy is strong, consumers tend to increase dining in restaurants, thereby increasing demand for commercial and institutional food packaging. However, in this still-sluggish economy, expenditures for dining out are typically the first budget item trimmed by consumers.

Our study projects modest growth in most injection molded packaging segments during the last quarter of 2009 and throughout 2010. The largest market and area of highest growth is bottle preforms for stretch-blow molding (see chart). They consumed 4.6 billion lb of resin in 2009. Since the economy is improving and there is ongoing conversion from glass to plastic in liquor and liquid food packaging, preform molders anticipate growth of 7.6% annually. New multi-layer and high-barrier perform technology will contribute to additional PET bottle applications for beer, wine, and liquor.

Lids, caps, closures, overcaps, and packaging dispensers were the second largest market at 1.6 billion lb. Demand growth here is expected to hover around 4% AAGR through 2010. It depends on several factors—growth of the end-use market, new closure designs, energy costs, resin prices, and production moving overseas. Also, lower-cost compression molding has made inroads into caps and closures. According to participants in this market, nearly one-third of caps are now compression molded.

Molders of pails consumed about 876.7 million lb of resin in 2009. This business is expected to have a slow AAGR of 2.2% through 2010. Several processors say the pail market grows in proportion to new housing starts, which have been depressed. However, new pail designs and more remodeling of existing homes are helping to maintain growth.

Molders of food packaging gobbled up nearly 357.5 million lb in 2009, and are expected to realize AAGR of 5.8%. Consumers have been eating at home more and preparing their own lunches in response to the slower economy, increasing growth in this sector.

Cosmetic and personal-care containers accounted for 188.6 million lb of resin, an amount expected to grow modestly at 3.1% through 2010, primarily due to new package designs.

Pharmaceutical vials swallowed 174.3 million lb of resin in 2009, and AAGR is expected to be 3%. With increasing growth in the senior population, and most consumers not cutting back on healthcare, these products should continue to prosper.

Materials-handling and shipping containers used 629.1 million lb this year and are expected to grow 6.6% annually. They should continue to displace corrugated paperboard, wood, and metal.

 

About the Author

Bart Thedinger is managing partner of Mastio & Company in St. Joseph, Mo., consultants in industrial-consumer opinion research and market trends in the plastics industry.