Compared to the turbulent years 2017 and 2018, the first three quarters of 2019 were anemic for manufacturers of primary plastics processing machines. After four quarters of soaring shipments in 2018 to a high of about $ 375 million, shipments of plastic injection molding and extrusion equipment fell 27.6% to $ 273.0 million in the first quarter of 2019, according to the Committee on Equipment Statistics (CES) from the Plastics Industry Association (PLASTICS; Washington, DC). And from then on, not much has improved.
The shipping value in the second quarter of 2019 increased 8.2% to approximately $ 295 million; in the third quarter it was down 0.5% to $ 293.7 million. While total deliveries decreased, extrusion machines increased in the third quarter, with deliveries of single-screw and twin-screw extruders increasing by 5.3% and 13.9%, respectively. Injection molding machine shipments fell by 1.9%.
Deliveries in the third quarter fell by 15.9% compared to the same quarter of the previous year. The shipping value of twin screw extruders fell by 29.3% and that of single screw extruders by 5.6%. Injection molding machine deliveries fell by 15.5% in value compared to the third quarter of 2018.
“The plastics industry is a mature industry and its growth will continue to be based on gross domestic product (GDP),” said Perc Pineda, PhD, chief economist at PLASTICS. “The sideways trend for the third quarter is in line with the weaker manufacturing activity in the economy this year. In the Plastics Quarterly, our GDP growth forecast for the second and third quarters was 2.0% and 1.9%, and we got it. The number of machine deliveries was consistent with weaker manufacturing activity against the backdrop of a sideways economy, ”said Pineda.
The CES also conducts a quarterly survey among suppliers of plastic machines, which inquires about current market conditions and expectations for the future. For the coming quarter, 39% of respondents expect conditions to either improve or remain stable, significantly less than the 56% who felt similar in the previous quarter. For the next 12 months, 63% expect a stable to better market situation, compared to 53% in the survey of the previous quarter.
The current international trading environment continues to affect the plastics machinery trade. Plastic machine exports were $ 378.4 for the third quarter, down 0.1% from the second quarter. Mexico, Canada and Germany remained the largest US export markets. These three countries combined accounted for 48% of US plastics machinery exports in the third quarter.
China was the fourth largest market in the third quarter, with plastic machine exports totaling $ 22.2 million, down 27.6% from the second quarter. Despite the uncertainty surrounding Brexit, the UK remained one of the top 10 export markets for plastics machinery in the third quarter. Plastic machinery imports decreased 0.9% to $ 785.7 million in the third quarter. Fewer exports and imports have meant that the plastic machinery trade deficit has decreased by 1.7%.
“The challenges and concerns facing the corporate sector of today’s economy – and the plastics industry is no exception – are primarily driven by external factors – weak global economic growth and ongoing trade disputes – affecting the US, which is largely an open economy.” . It is safe to say that the ongoing trade disputes are unlikely to be resolved this year, ”added Pineda.
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