US PLASTICS MACHINERY SHIPMENTS IMPROVED IN THE SECOND QUARTER

IT IS INTERESTING to read some figures from the USA, where plastics is one industry that is outpacing all manufacturing, according to the 2018 Size & Impact Report, an annual publication of the American Plastics Industry Association (PLASTICS). Throughout, the report shows that the U.S. plastics industry remains a key part of the American economy and continues to navigate its way to growth and hiring despite the presence of several social, political and economic challenges. Furthermore, the report shows when suppliers to the industry are included, the employment total grows to an estimated 1.81 million and shipments grow to USD590.6 billion. Compared with 2016, this marks a 2.8 percent increase in jobs and a seven percent increase in shipments.

There was a decrease in the first quarter of 2019 of 27.6 percent but in the second quarter plastics machinery shipments have increased 8.2 percent, although this is a sluggish 12.7 percent lower than last year’s second quarter.

The preliminary estimate of shipment value from reporting companies totalled USD295.3 million. Injection moulding shipments rose 7.4 percent and single- and twin- extrusion equipment shipments increased 13.6 percent and 13.9 percent, respectively. While the value of shipments for single-screw extruders and injection moulding equipment increased 4.3 percent and 7.4 percent, respectively, for a year ago, twin-screw extruders were 29.5 percent lower.

“The second quarter numbers are encouraging, but machinery shipments remain comparatively lower than the previous quarters. What’s happening is not surprising judging from the macroeconomic environment. Real business investment spending in the second quarter fell 5.5 percent. In particular, the investment spending in industrial equipment flattened in the second quarter,” according to Perc Pineda, chief economist of PLASTICS.

The CES also conducts a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future. In the coming quarter, 56 percent of respondents expect conditions to either improve or hold steady – lower than the 70 percent that felt similarly in the previous quarter. As for the next 12 months, 53 percent expect market conditions to be steady-to- better, down from 60 percent in the previous quarter’s survey.

On the international trade front, plastics machinery exports in the second quarter totalled USD378.8 million – a 4.3 percent increase from the previous quarter. Mexico, Canada and Germany remained the largest US export markets. More than half (53 percent) of US plastics machinery was exported to these three countries. While exports to China increased 11.4 percent in the second quarter, it was 37 percent lower than during the same period the previous year. “In the short-term there are two outstanding issues that need to be resolved. Mexico has ratified the US- Mexico- Canada Agreement (USMCA), but the US and Canada have yet to sign off on this critical North American trade pact. Both countries must ratify the USMCA. Unless that is resolved, the uncertainty from the ongoing US- China trade dispute will continue to run high and will negatively impact not only the plastics industry but the global economy,” Pineda added.