North American plastics machinery shipments declined in Q4 2023

Shipments of primary plastics processing machinery in North America declined in the fourth quarter of 2023, according to new figures from the Plastics Industry Association’s Committee on Equipment Statistics (CES).

The preliminary estimate showed a shipment value of US$348.1 million for the quarter. While the decline from Q3 2023 was only 0.4 per cent, the year-over-year (Y/Y) figure was more pronounced, down by 19.5 per cent from Q4 2022.

Single-screw extruders experienced a notable 19.5 per cent decrease in quarter-over-quarter (Q/Q) analysis but showed a 4.9 per cent increase year-over-year (Y/Y). Twin-screw extruders also experienced a comparable decrease of 19.4 per cent Q/Q and a more substantial 23.8 per cent decrease Y/Y. Conversely, injection molding shipments increased by 3.8 per cent Q/Q but faced a 21.1 per cent decrease Y/Y.

Image Credit: Plastics Industry Association

“Last year saw minimal fluctuations in quarterly plastics machinery shipments,” said Perc Pineda, the Association’s chief economist. “The modest upturn observed in the second quarter was short-lived, with shipments remaining steady until the year’s end. The decline in U.S. manufacturing activity, coupled with a high-interest-rate environment, contributed to a slowdown in business investment spending, including in plastics machinery.”

U.S. exports of plastics equipment saw a 5.1 per cent increase in the fourth quarter, to US$284.6 million from Q3, with Y/Y exports rising by 19.6 per cent. Mexico and Canada remained the top export markets for U.S. plastics equipment, with a combined export share of 62.3 per cent. Nearly half of all exports, US$124.3 million, went to Mexico, while US$53 million went to Canada. Imports increased by 11.7 per cent Q/Q, reaching US$427.6 million, but dropped by 14.1 per cent Y/Y.

And in the latest quarterly survey by CES polling plastics machinery suppliers for market insights and equipment expectations, results showed a notable uptick in participants anticipating improved market conditions over the next twelve months compared to the previous year. The percentage of those expecting conditions to either remain the same or improve rose to 82.9 per cent, signaling optimism compared to the 56.1 per cent recorded in the prior quarter.

“While the unexpected 2.5 per cent U.S. economic growth in 2023 averted a recession, primarily fueled by robust household spending in the services sector, signs of recovery may emerge in 2024,” Pineda said. “Sustained consumer spending could prevent economic deterioration, especially if labour markets continue to stay healthy. As interest rates begin to return to normalcy from inversion, there’s a likelihood that business investment, including in equipment, will reverse course.”