Vigilancia Tecnológica
Machinery shipments down in Q1, but poised for growth
Shipments of primary plastic machinery in North America totaled $334.9 million in the first quarter of 2021, dropping about 11 percent compared to the prior quarter while following a seasonal pace, according to preliminary estimates from the Plastics Industry Association.
The decrease in shipments of injection molding machines and extruders comes on the heels of three consecutive quarters of growth, the Washington-based trade group said in a news release about figures compiled by its Committee on Equipment Statistics.
Compared to the first quarter of 2020, when the pandemic was declared and manufacturing came to a grinding halt, plastics machinery shipments increased a solid 31.9 percent.
Perc Pineda, chief economist of the trade group, isn't surprised the quarter-to-quarter data came in lower.
"This is in sync with overall economic activity that is usually slow, starting every first quarter," Pineda said. "Judging from a year-over-year comparison, plastics machinery shipments were actually off to a good start."
Bill Wood, Plastics News economics editor, agrees that overall the numbers look pretty good.
"Comparisons to last year will not provide much insight," Wood said, pointing instead to a chart released by the committee showing Q1 2019 shipment values of about $300 million, which was before COVID-19, compared to Q1 2021's shipment values of $335 million.
"So it looks like the market is off to a good start," Wood said. "The data and growth rates in the second half of this year will be interesting because the second half of last year was actually pretty strong."
If the economy stays in a recovery cycle, Pineda expects plastics machinery shipments to increase this year.
"However, supply chain issues in plastics end markets could slow growth in plastics equipment demand, so we'll be watching market dynamics very closely in the coming months," he cautioned.
Lumber, semiconductors, steel, metals and chlorine are among the materials in short supply due to the pandemic, ice storms and other factors. The material shortages and associated price hikes are wreaking havoc on everything from home building to car dealership inventories to pool cleaning supplies.
A bright spot in terms of the value of shipped machines has been twin-screw extruders, which increased by 42.3 percent from quarter to quarter and by 18.3 percent over the same period in 2020. The machines extrude pipe, granules, wood plastic composites, profiles and materials used in the medical industry.
Also in the first quarter, the values of shipped injection molding equipment decreased by 11.1 percent compared to the fourth quarter of 2020 but increased 39.8 percent compared to the prior year. Single-screw extruders decreased by 38.3 percent from quarter to quarter and by 28.9 percent from year to year.
Market sentiment is up, however. The trade group's equipment committee surveys plastics machinery suppliers every quarter about market conditions and expectations. Overall, the outlook is very optimistic, according to Pineda
"The equipment sector of the plastics industry came out of 2020 strong," he said. "The much-improved trade outlook will be a positive for plastics equipment suppliers on top of what can be expected as another good year for plastics equipment demand."
There is a little skepticism about the coming quarter. Some 89.5 percent of respondents expect conditions to improve or hold steady. That's lower than the 96 percent that felt similarly in the previous quarter. But for the next 12 months, 93 percent of survey takers expect steady-to-better market conditions, which is up from 89.8 percent in the fourth quarter 2020 survey.
In other statistics, the trade group says plastics machinery total exports increased by 9.4 percent to $395 million in the first quarter compared to the fourth quarter 2020.
Imports fell by 3.5 percent to $845 million, creating a $450 million trade deficit, which was 12.6 percent lower than in the fourth quarter of 2020.
Also, the volume of merchandise trade is expected to increase this year as global economic conditions improve.
The decrease in shipments of injection molding machines and extruders comes on the heels of three consecutive quarters of growth, the Washington-based trade group said in a news release about figures compiled by its Committee on Equipment Statistics.
Compared to the first quarter of 2020, when the pandemic was declared and manufacturing came to a grinding halt, plastics machinery shipments increased a solid 31.9 percent.
Perc Pineda, chief economist of the trade group, isn't surprised the quarter-to-quarter data came in lower.
"This is in sync with overall economic activity that is usually slow, starting every first quarter," Pineda said. "Judging from a year-over-year comparison, plastics machinery shipments were actually off to a good start."
Bill Wood, Plastics News economics editor, agrees that overall the numbers look pretty good.
"Comparisons to last year will not provide much insight," Wood said, pointing instead to a chart released by the committee showing Q1 2019 shipment values of about $300 million, which was before COVID-19, compared to Q1 2021's shipment values of $335 million.
"So it looks like the market is off to a good start," Wood said. "The data and growth rates in the second half of this year will be interesting because the second half of last year was actually pretty strong."
If the economy stays in a recovery cycle, Pineda expects plastics machinery shipments to increase this year.
"However, supply chain issues in plastics end markets could slow growth in plastics equipment demand, so we'll be watching market dynamics very closely in the coming months," he cautioned.
Lumber, semiconductors, steel, metals and chlorine are among the materials in short supply due to the pandemic, ice storms and other factors. The material shortages and associated price hikes are wreaking havoc on everything from home building to car dealership inventories to pool cleaning supplies.
A bright spot in terms of the value of shipped machines has been twin-screw extruders, which increased by 42.3 percent from quarter to quarter and by 18.3 percent over the same period in 2020. The machines extrude pipe, granules, wood plastic composites, profiles and materials used in the medical industry.
Also in the first quarter, the values of shipped injection molding equipment decreased by 11.1 percent compared to the fourth quarter of 2020 but increased 39.8 percent compared to the prior year. Single-screw extruders decreased by 38.3 percent from quarter to quarter and by 28.9 percent from year to year.
Market sentiment is up, however. The trade group's equipment committee surveys plastics machinery suppliers every quarter about market conditions and expectations. Overall, the outlook is very optimistic, according to Pineda
"The equipment sector of the plastics industry came out of 2020 strong," he said. "The much-improved trade outlook will be a positive for plastics equipment suppliers on top of what can be expected as another good year for plastics equipment demand."
There is a little skepticism about the coming quarter. Some 89.5 percent of respondents expect conditions to improve or hold steady. That's lower than the 96 percent that felt similarly in the previous quarter. But for the next 12 months, 93 percent of survey takers expect steady-to-better market conditions, which is up from 89.8 percent in the fourth quarter 2020 survey.
In other statistics, the trade group says plastics machinery total exports increased by 9.4 percent to $395 million in the first quarter compared to the fourth quarter 2020.
Imports fell by 3.5 percent to $845 million, creating a $450 million trade deficit, which was 12.6 percent lower than in the fourth quarter of 2020.
Also, the volume of merchandise trade is expected to increase this year as global economic conditions improve.
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