Plastics machinery shipments decline again in Q2, report says

Graph Credit: Plastics Industry Association

North American plastics machinery shipments declined in the second quarter of 2024 by almost 16 per cent compared to the previous quarter, according to new data from the Committee on Equipment Statistics (CES) of the Plastics Industry Association.

The second-quarter 2024 shipment value of primary plastics machinery in North America, covering injection molding and extrusion, is estimated at US$224.8 million, which marks a 15.4 per cent decrease from the previous quarter and a 36.2 per cent year-over-year decline, CES officials said in an Aug. 13 statement.

Single-screw extrusion saw a 3.4 per cent quarter-over-quarter (Q/Q) increase, but a 28.6 percent year-over-year (Y/Y) decrease. Twin-screw extrusion experienced a 23.5 per cent decrease Q/Q and a 25.3 decline Y/Y. Injection molding shipments fell by 16.3 per cent Q/Q, and showed a Y/Y decline of 37.7 per cent.

“The second consecutive quarter of decline in shipments is not due to a pullback in plastics demand,” said Perc Pineda, chief economist at the Plastics Industry Association. “In fact, based on monthly Plastics Demand Estimate, there has been growth in demand recently. There is no indication that the baseline demand for plastic products has deteriorated.”

Manufacturers’ finished goods inventories of plastics and rubber products were estimated at US$15.0 billion in June this year, compared to US$15.2 billion in June last year, indicating slow inventory adjustments.

In Q2 2024, U.S. total exports of plastics equipment declined by 14.7 per cent to US$341.0 million compared to the previous quarter, while imports decreased by 3.8 per cent to US$856.8 million during the same period. Slightly more than half (53.4 per cent) of exports went to Mexico and Canada, jointly accounting for US$182.3 million of U.S. plastics machinery exports globally.

“While the rate of decline in the second quarter was significantly less than in the first quarter, the industry continues to deal with higher interest rates, and that’s weighing on capital expenditure plans,” Pineda said. “The economy is currently not operating at maximum capacity in plastics processing; capacity utilization is below potential, leaving room for growth.”

Results from the latest CES quarterly survey, meanwhile, showed that a high percentage (79.9 per cent) of respondents anticipate steady or improved market conditions over the next 12 months. However, 40.0 per cent reported an increase in quoting activity, which was lower than the 48.9 per cent in the previous quarter’s survey.