By Karen Hanna
Primary machinery shipments showed significant declines in the fourth quarter of last year, after some increases in the third quarter, according to the most recent report on equipment sales released on March 14 by the Committee on Equipment Statistics (CES) of the Plastics Industry Association (PLASTICS).
Meanwhile, the unemployment rate in the plastic and rubber products manufacturing industry, which spiked in January, dropped back down to more typical levels in February, 2.9 percent, “confirming that the elevated 8.2 percent rate in January was transitory,” according to a LinkedIn post by Perc Pineda, PLASTICS’ chief economist.
But in analyzing machinery shipment trends, he said, “Weakness in U.S. manufacturing persisted in the fourth quarter, driven by increased economic policy uncertainty amid expectations of a shift in U.S. trade policy after the November elections.”
According to CES, the total estimated value of shipped primary processing machines was $288.8 million in the fourth quarter, representing a 12 percent decrease from the revised third-quarter estimate and a 17 percent drop from the same period last year. Twin-screw extruder shipments saw the steepest decline, down 48.4 percent from the previous quarter and 8.3 percent over the same period in 2023.
Also down were shipments of single-screw extruders, a reduction of 24.8 percent from the third quarter and 32.6 percent from the same period in 2023.
Injection molding shipments declined the least, down 5.5 percent from the third quarter, and 16.1 percent compared with 2023.
“Plastics equipment shipments pared back their gains in the third quarter, underperforming forecasts,” Pineda said.
Overall, 2024 ended with U.S. plastics equipment total exports falling 5.5 percent to $329 million in the fourth quarter. Mexico and Canada — both countries targeted by a recent escalation in tariffs and counter-tariffs — remained the largest export markets for plastics machinery, with exports to these countries reaching $157.9 billion, representing 48 percent of U.S. total plastics machinery exports.
Pineda noted, “Plastics demand in the U.S. remains stable. However, slack in plastics production is leading to weaker-than-expected demand for primary plastics equipment. Additional cuts in the Fed funds rate are still projected this year. Lower interest rates and greater clarity on U.S. economic policy, particularly on trade, would help reduce uncertainties across the plastics industry supply chain.”
In a survey of the CES members, 83 percent of respondents expect market conditions to remain steady or improve over the next 12 months.
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