• PT Youtube
  • PT Facebook
  • PT Linkedin
  • PT Twitter
12/28/2012 | 2 MINUTE READ

Survey Shows 2013 Shaping Up Nicely

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

Annual capital spending survey shows that processors plan to continue investment in new technology this year.

I write this as our policymakers are bickering about taxes and pending cuts in spending, dragging us perilously closer to that yawning  “fiscal cliff” (nerve wracking enough for me, as I’m afraid of heights). Possible self-inflicted economic injury aside, we don’t need a crystal ball or Magic Eight Ball to get an idea of how things are looking for 2013. We don’t need these things because we asked you, and you told us.

Every summer, under our parent company, Cincinnati-based Gardner Business Media, we survey our readers about what they plan to buy in the way of capital equipment for the upcoming year. We call this our Plastics Processing Capital Spending Survey & Forecast. We mailed it to 5000 of our subscribers and received more than 500 replies.

The survey delves into equipment of virtually all types, but let me bottom-line it for you: According to the projections we’re making based on your input, investment in primary processing equipment in 2013 will increase by more than 2% from 2012. While that might not seem to be anything to get too excited about, consider that in 2012 you invested more money in primary processing than you did at any time since 2008.

Plastics Technology economic columnist Bill Wood of Mountaintop Economics and Research has more insights to share that support what we found out from you. In a recent blog that appeared on the website of our sister publication, MoldMaking Technology magazine (moldmakingtechnology.com), Wood reported that the Census Bureau’s data on the value of plastics product shipments through the third quarter of 2012 was up 4% from the year before. “The total volume of plastics products manufactured in the U.S. is still about two years away from the pre-recession levels, but the total dollar value of shipments of plastics products is near the all-time high,” Wood wrote.

He expects 2012 to finish 3% above 2011 in volume of plastics products processed. As for 2013, Wood writes that “the industry’s capacity utilization rate will hold mostly steady at current levels through the first quarter, and it will then rise. In 2013, the total volume of plastics products manufactured in the U.S. will grow by 5% and the capacity utilization rate will exceed 80% by year’s end (it was at about 78% in 2012).” Capacity utilization of 80-85% usually triggers investment in new equipment.

Wood writes our monthly “Wood on Plastics” column, in which he analyzes trends in major end-markets for plastics. He is basing his projections for 2013 in large part on growth in the housing market. “The end-markets related to the housing sector (appliances and retail sales) are past their cyclical bottoms and are both expected to rebound in 2013,” he states. Besides which, he notes, packaging, automotive, medical, and electronic products will continue to grow this year.

Processors should expect the cost of energy and plastics resins to increase as the overall economy rebounds, Wood states. But this could have a positive impact on machinery sales, as builders of all types of equipment continue to roll out new designs that are more energy efficient while developing processing technologies that permit more judicious use of material.

During 2012 my colleagues and I visited more than 20 plastics processing plants and spoke to dozens more. Those that are thriving have shrewdly invested in new technology that gives their products an edge in the marketplace—either by increasing quality or throughput or both—and have increased their bottom line to boot. I think there is a lesson to be learned there.