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Auxiliary equipment a bright spot in U.S. machinery report

Shipments of primary plastics machinery in North America dropped 8% in the fourth quarter of 2007 from the third quarter, to a total value of $210 million. That’s according to the Society of the Plastics Industry’s (SPI; Washington, DC) Committee on Equipment Statistics (CES) fourth quarter 2007 report, which say that the for the full year, the total value of plastics machinery shipments in 2007 was down 12% from 2006 on a dollar-value basis. In terms of units, equipment shipments fell by 13% for the year.
Economist Bill Wood, founder of Mountaintop Economics & Research Inc. (Greenfield, MA), provided analysis of the figures, positing that high resin and energy costs, combined with slowing auto and construction markets, will keep machinery investment flat through the first half of 2008, with some chance for a gradual rebound in the second half of the year.
Some items were up in the report, including auxiliary equipment, which booked $80.6 million in deliveries in the fourth quarter, up 1% year-over-year compared to 2006. On the primary processing side, extrusion machinery sales fell 20% from $39.5 million in the fourth quarter of 2006 to $31.5 million. No surprise there: in interviews with MPW in the past months, manufacturers of extruder for pipe and profile extrusion have said North American sales have plummeted as the U.S. housing boom comes to a crashing halt.
Blowmolding units fell by 18, quarter to quarter, with 26 delivered in the fourth quarter of 2007. That figure was up by one unit compared to the third quarter of 2007. Injection molding machine units dropped 13% from 827 in the fourth quarter of 2006, to 722 for the final three months of 2007.
According to the U.S. Federal Reserve’s industrial production and capacity utilization figures for the fourth quarter of 2007, industrial production dipped slightly in October and rose by .3 and .2% in November and December 2007, respective. In January, it was flat overall, but the output index for plastics and rubber products actually fell about 1.5%. In terms of capacity utilization, plastics and rubber products posted rates of 86.7, 87.1, and 86.0 for the last three months of 2007, with January 2008 coming in at 84.5%.
On Feb. 13, U.S. President Bush approved the U.S. Economic Stimulus Package, which includes a bonus depreciation provision for new equipment and software placed in service in 2008, allowing large and small businesses to expense up to 50% of the value of capital goods placed into service in 2008. In certain cases, small businesses can nearly double the amount they immediately write-off.
The dollar value of plastics machinery shipped in the U.S. in the first quarter of 2008 expanded on a year-over-year and quarterly basis, growing 4% from the first three months of 2007 to $227 million. According to that most recent SPI CES report, compared to the fourth quarter of 2007, the dollar value of shipments was up 8%, with the strongest growth seen in blowmolding equipment, with the dollar value of machines delivered in the first quarter up 66% from the first quarter 2007 on the basis of 25 units delivered.
The number of injection molding machines shipped in the first quarter was down 4% year over year and off 11% compared to the last quarter of 2007. Extrusion units were down 14% in terms of units compared to the first quarter of 2007, but the number was up 3% compared to the final quarter of last year. In auxiliary equipment, sales were unchanged compared to a year ago and up 3% over the final three months of 2007.
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