“The CES shipments data have steadily posted year-over-year gains in every quarter since 2010. This is a better performance than many other sectors of the U.S. and global economy. U.S. GDP will continue to grow at an annualized pace of at least 2 percent for the remainder of 2015, and the outlook is for accelerating growth in 2016. This bodes well for the plastics machinery markets because it will continue to generate rising aggregate demand,” according to Bill Wood, Economic Analyst for the CES.
Shipments of injection molding, single-screw extrusion, twin-screw extrusion and blowmolding equipment for reporting companies totaled $303.5 million in Q2. This was an increase of 5.5% from the shipments total of $287.7 million in Q1 of 2015, and it was a gain of 6.7% when compared with the shipments total from same quarter of a year ago. For the year-to-date, the value of primary plastics equipment shipments is up 3.9% over last year.
According to CES statistcs, the shipments value of injection molding machinery escalated 3.9% in Q2 when compared with same quarter from the previous year. The shipments value of single-screw extruders dropped 1.5% from last year. The value of shipments of twin-screw extruders (includes both co-rotating and counter-rotating machines) gained 1% in Q2. The Q2 shipments value of blow molding machines skyrocketed to 66.4%.
The CES also compiles data on the auxiliary equipment segment (robotics, temperature control, materials handling, etc.) of the plastics machinery industry. New bookings of auxiliary equipment for reporting companies totaled $121.4 million dollars in Q2. This was a rise of 12.4% when compared with the total from Q2 of last year.
The growth in plastics machinery shipments was a tad slower than the year-over-year increase of 5.5% (seasonally-adjusted, annualized rate) in total business investment in industrial equipment (plastics machinery is a subset of this data) compiled and reported by the Bureau of Economic Analysis as part of their quarterly GDP data release.
The Q2 gain in the CES shipments data was moderately stronger than the other major industrial machinery market indicator, compiled and reported monthly by the Census Bureau, which showed that the total value of shipments of industrial machinery increased by 2.4% in Q2 when compared with the year before (plastics machinery shipments are also a subset of this data).
"Despite the volatility in the stock market in recent weeks, the underlying fundamentals indicate that the recovery in the U.S. economy is still intact. The plastics industry has been a growth leader for the US manufacturing sector throughout the recovery, and this will continue through the foreseeable future. Consumer confidence is rising, residential construction activity is accelerating, and stronger economic growth is expected for the rest of the year. Overall, we are reaping the benefits of low interest rates, low energy prices, and rising household incomes resulting from stronger employment levels. This is more than enough to offset the drag caused by weakness in the oil patch, a stronger dollar, and slower export demand," said Wood.
In a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future responses from the Q2 survey indicate that machinery suppliers are fairly optimistic about the market demand for their products in the months to come. Both for Q3 and during the next twelve months, 88% of the respondents expect conditions to either improve or hold steady. Quoting activity was higher in the second quarter for half of the survey participants.
North America and Mexico are the global regions where the most promising market conditions for machinery suppliers are expected in the coming year. Expectations for Latin America are for mostly steady market conditions, while the outlook for Europe and Asia are steady-to-weaker.
When asked about their expectations for the major end-markets, the Q2 respondents indicated that automotive and packaging will remain strong in terms of demand for plastics products and equipment. Expectations for all other major end-markets call for firm market conditions to persist during the next 12 months.