North American plastics machinery shipments drop in third quarter

Shipments of injection molding and extrusion equipment in North America contracted in the third quarter, according to new statistics compiled by the Committee on Equipment Statistics (CES) of the Plastics Industry Association.

A preliminary estimate totaling US$353.8 million represents a 14.4% decrease from the previous quarter, but the estimate increased by 6% from last year.

Of the three primary plastics type of machinery, the value of injection molding shipments fell 17.1% in the third quarter. Shipments of single-and twin-screw extruders rose by 4.9% and 12.4%, respectively, in the third quarter, officials with the Washington, D.C.-based association said in a Nov. 17 news release. Compared to the third quarter last year, shipments of single-screw extruders fell by 13.1% while shipments of twin-screw extruders rose by 19.3%.

Plastics machinery exports decreased by 10.2% to $198.8 million in the third quarter, the statement said. Mexico and Canada remained the top export markets of plastics machinery from the U.S. in the third quarter. “The combined exports to USMCA partners totaled US$109.7 million, which was 65.9% of total plastics machinery exports of the U.S.,” the release said. “Imports decreased by 12.1% to US$423.6 million in the third quarter.”

Image Credit: Plastics Industry Association

The U.S. plastics machinery trade deficit narrowed from US$260.7 million in the second quarter to US$224.7 million in the third quarter, the release said, while moderating global economic growth and a strong U.S. dollar is slowing plastics machinery trade.

“It can be argued that the slowdown in plastics machinery shipment in the third quarter is in sync with the cooling of the U.S. economy. However, compared to the quarterly shipments in 2021 – a stellar year for the plastics industry particularly for plastics equipment suppliers – this year’s third quarter shipments remain above the first three quarters’ shipments last year,” said Perc Pineda, Plastics Industry Association’s chief economic officer. “Historically, there is a bump up in shipments in the fourth quarter. This was the case even before the COVID-19 pandemic. Given supply chain issues due to the pandemic, which have stretched delivery lead time, it would not be surprising to see shipments in the fourth quarter to be above the third quarter. There is also a huge year-end push for businesses to get their manufacturing capacity in gear for the coming year. This should support stable demand for plastics equipment next year, albeit lower than this year because of moderating economic growth.”

The CES also conducts a quarterly survey of plastics machinery suppliers that asks about present market conditions and expectations for the future. The outlook of the survey participants, particularly for the next 12 months, has not changed significantly. While 31.3% of the survey respondents expect market conditions to either improve or hold steady in the next quarter, 34.4% expect market conditions to be steady-to-better, which was marginally lower than the 35.0% in the second quarter’s survey results.

“The outlook for the next 12 months virtually unchanged from the second suggests that plastics equipment suppliers have considered slower economic growth ahead and have not strategized accordingly for the 2023,” Pineda said. “In sum, the third quarter data is consistent with the projected growth in plastics machinery shipments for the second half of 2022. However, the U.S. manufacturing sector continues to face headwinds – elevated energy prices, rising interest rates, and inflation – which could weigh on the economy’s manufacturing output in 2023.”