Data shows that the shipments total typically declines in the first quarter of the year when compared with the fourth quarter of the previous year. Due to tax considerations and other budget-related reasons, the fourth quarter is usually the strongest quarter of the year for machinery shipments, and the first quarter is often the weakest. Nevertheless, 2014 is off to a good start. The total for Q1 of this year represented a gain of almost 11 percent when compared with the same quarter of 2013. For the sake of comparison, the total value for primary plastics equipment shipments in 2013 was up 8 percent when compared with the annual total from 2012.
The shipments value of injection molding machinery increased 9 percent in Q1 of 2014 when compared with the total from Q1 of last year. The shipments value of single-screw extruders escalated 4 percent, and the value of shipments of twin-screw extruders jumped 15 percent. The shipments value for blowmolding machines spiked up 60 percent in Q1.
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 $98.6 million dollars in Q1. This represented a 6 percent gain when compared with the total from Q1 of 2013.
The gain in the CES data on plastics machinery shipments corresponds with the gains in the two major data series compiled by the US.. government that measure activity levels in the industrial machinery sector. According to the Bureau of Economic Analysis, business investment in industrial equipment rose by 5 percent (seasonally-adjusted, annualized rate) in Q1 when compared with Q1 of 2013. The other important machinery market indicator, compiled by the Census Bureau, showed that the total value of shipments of industrial machinery jumped 29 percent in Q1.
"The momentum that the plastics machinery sector enjoyed in 2013 continued unabated in the first quarter of 2014," according to Bill Wood, the plastics market economist who analyzes and reports on the plastics machinery market sector for the CES. "The trend in total investment in industrial machinery in the U.S.--the category that includes plastics machinery--has risen sharply in recent quarters. We are entering the sweet spot of the capital expenditure cycle, and this bodes well for suppliers of plastics machinery, as well as the whole manufacturing sector."
The CES also conducts a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future. The responses from the Q1 survey were a bit more optimistic than they were in the Q4 survey, and they represent a continuation of the optimism that is broad-based across the industry. When asked about expectations for future market conditions, 93 percent of the respondents expect conditions to stay the same or even improve in the coming quarter, and 88 percent expect them to hold steady or get better during the next 12 months.
North America, Latin America and Mexico are the global regions where the strongest gains are expected, while expectations slipped a bit for Europe and Asia. As for the major end-markets, the respondents to the Q1 survey expect that automotive, medical and packaging will continue to be the strongest in terms of demand for plastics products and equipment. Expectations for the appliances sector continued to trend upward.