Wednesday, March 18th, 2015

Strong Fundamentals Yield Strong Plastics Machinery Shipments, Set Stage for Continued Growth

SPI’s Committee on Equipment Statistics (CES) reported this week that shipments of plastics machinery posted a robust rise in the fourth quarter of last year. This makes 2014 the fifth consecutive year of increases in primary plastics equipment, which increased 7.6 percent compared with the annual total from 2013.

PRIMARY PLASTICS EQUIPMENT SHIPMENTS

Q4CESReport_Graph_Web

This is excellent news to hear mere days ahead of NPE2015 but more than that the report notes that the basics that made equipment and machinery sales so strong in 2014 suggest a brighter outlook for plastics and for the economy as a whole. “The economic fundamentals that favor continued investment in capital equipment are expected to persist through 2015 as well,” said Bill Wood, the plastics market economist who analyzes and reports on the plastics machinery market sector for the CES.

The upward trend in plastics machinery data corresponds with long-term trends in the two major data series compiled by the U.S. government that measure overall demand for industrial machinery. One of those data series, published by the U.S. Bureau of Economic Analysis, found that business investment in industrial equipment escalated by 16 percent (seasonally-adjusted, annualized rate) in the fourth quarter of 2014, compared to 2013. It also found that the annual total for investment in 2014 jumped a rigorous 13 percent.

Figures are even more impressive in the other important machinery market indicator, compiled by the Census Bureau, which showed that the total value of new orders of industrial machinery jumped 20 percent when compared with the total from Q4 of 2013. For the year as a whole in 2014 industrial machinery orders were up 30 percent, a major increase that suggests significant market strength.

All in all, this signals another solid year for 2015, in plastics machinery and in the broader American economy as well.

“The short-term problems caused by a stronger dollar and a downsized oil patch notwithstanding, the recovery in the U.S. economy will continue through 2015,” Wood said. “The stock market is still at an all-time high. Corporate profits are still at record levels. And as I have said before, the three main trends that will drive the economy over the coming months are already well-established. They are: low interest rates, low energy prices, and rising wages and household incomes resulting from stronger employment levels.”

Read the full report from the CES here.

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