Wednesday, November 26th, 2014
Market demand overall for plastics machinery continued to grow in the third quarter of 2014, according to the latest report from SPI’s Committee on Equipment Statistics (CES). The figures dovetail nicely with data from the U.S. Bureau of Economic Analysis (BEA) to suggest that purchasing in the U.S. is up and that the country will drive demand in the sector for the remainder of the year and into 2015.
“The market conditions that drive investment in new industrial equipment have prevailed throughout all of 2014, and I expect these conditions to persist in 2015. These are: low interest rates, and the need for increased productivity in order to meet rising aggregate demand,” according to Bill Wood, the plastics market economist who analyzes and reports on the plastics machinery market sector for the CES.
Shipments of primary plastics equipment (injection molding, extrusion and blow molding equipment) for reporting companies totaled $301.4 million in Q3. This is 6 percent higher than the revised shipments total of $284.3 million in Q2 of this year, and is down only 2 percent compared with the robust total from Q3 of 2013. For the year to date, the total value of primary equipment shipments is up 6 percent compared with last year.
Meanwhile, two of the BEA’s major data series measuring activity in the industrial machinery sector showed that business investment in industrial equipment escalated by 16 percent in the third quarter of 2014, compared to the same period last year, and that investment year-to-date is up by 13 percent. The Census Bureau has also reported that the total value of new orders of industrial machinery leapt by 47 percent in Q3 when compared with the same period from last year, and that year-to-date orders are up by 34 percent.
An increase in shipments among reporting companies and major jumps in U.S. purchasing suggests a healthy demand for plastics machinery in the region as it moves into the New Year. “From a global perspective, the North American region will be the strongest in terms of total economic activity in the coming months,” Wood said. “Strong demand in the U.S. will help to sustain the momentum in the global economy in 2015.”
CES also conducts a quarterly survey measuring supplier attitudes about current and future market conditions. Regarding the coming quarter, 95 percent of respondents expected conditions to stay the same or improve. That figure improved to 98 percent when the question was extended about the coming 12 months.
Read the full report release on SPI’s home page here.