Arlington, Va.(PMMI.org) — Total U.S. shipments of packaging machinery decreased by 0.4 percent to $5.885 billion in machines sold in 2008, according to PMMI’s latest Shipments & Outlooks Study. The annual state-of-the-industry report is based on data supplied by PMMI member companies and other industry sources.
The decrease was the first in seven years. Domestic sales of packaging machinery dipped 2.5 percent to $4.680 billion, and exports grew 8.6 percent to $1.2 billion. Imports also increased slightly, up 1.2 percent, with $1.7 billion shipped into the United States.
Demand for packaging machinery was down in 2008, with domestic shipments and imports totaling $6.419 billion, 1.2 percent less than 2007, according to the 2009 PMMI Shipments & Outlook Study.
“Given the state of the economy, it should be no surprise that shipments were down in 2008. However, the decrease in domestic shipping was offset by a continued strength in exports as member companies took their products overseas to benefit from favorable exchange rates,” says Charles D. Yuska, President & CEO, PMMI.
Category Fluctuation & Market Influences
The study showed growth for the year in seven of 18 categories:
- Pre-made bag hanging, opening, weighing, filling and closing machinery (+7.9%)
- Filling – Dry Products (+3.8%)
- Palletizing, Depalletizing and Checkweighing Machinery (+3.3%)
- Case and Tray Forming, Packaging/Unpacking, Closing and Sealing (+2.8%)
- Inspecting, Detecting and Checkweighing (+2.6%)
- Cartoning, multi-packing and Leaflet/Coupon Placing (+1.4%)
- Conveying, Feeding, Orienting and Placing (+0.2%)
"It was a very difficult year for the entire industry, with pockets of strength but an overall softness in demand in comparison to previous years,” notes Yuska. “That said, this industry continued to be stable, and companies that could demonstrate value saw sales increase, especially in targeted global markets — and that was a positive factor in 2008.”
A variety of factors influenced the U.S. market, including:
- Economic conditions created a negative environment for capital projects.
- Soaring commodity prices (ingredients, feed, oil, etc.) increased production costs, leading to reduced capital investment.
- The demand for alcoholic and non-alcoholic beverages was lower, leading to reduced demand for related machinery.
- Plant consolidations and closings reduced demand as they shrunk the pool of potential packaging machinery customers.
- Manufacturing plants’ capacity utilization rates stood at roughly 68 percent.
- Financial conditions caused banks to significantly tighten lending practices.
- Export Growth Tempers Difficult Year
With $1.205 billion in exports — an 8.6 percent increase for the year — PMMI member companies found opportunities to leverage the favorable currency exchange rate and grow market share in global packaging machinery markets.
Exports were 20.5 percent of total shipments, up from 18.7 percent in 2007, and the second consecutive year of growth.
“The study points out that steady growth for exports coincided with fluctuations in the exchange rate, coupled with extra efforts on the part of many US packaging machinery manufacturers to expand into new markets outside the United States,” Yuska says. “At the same time, PMMI introduced a global marketing campaign designed to promote PMMI members at leading international trade shows, bolstering and enhancing their marketing efforts.”
Data for the 2009 PMMI Shipments & Outlook Study, came from detailed questionnaires completed by 240 PMMI members plus non-members and other industry resources. Shipments were defined to include 2008 calendar-year billings of new machinery only.
Despite the decreases the study revealed, there will be chances to grow in the coming year, Yuska notes.
“2008 was a tough year for many PMMI members, but the good news is, the economy seems to be showing signs of improvement, and market trends such as sustainability, the increase in private label packaging, and a considerable focus on safety are providing new opportunities for sales growth,” he says.
The Executive Summary of the Shipments & Oulook Study is available at PMMI.org. For a copy of the 2009 PMMI Shipments & Outlook Study, contact Paula Feldman, PMMI: [email protected] or 703.243.8555. Participating companies receive the final report free of charge. Non-participating members can purchase it for $1,500; non-members for $2,500.
About PMMI
PMMI is a trade association with more than 540 member companies that manufacture packaging, processing and related converting machinery, commercially-available packaging machinery components, containers and materials in the United States and Canada. PMMI’s vision is to be the leading global resource for packaging, and its mission is to improve and promote members’ abilities to meet the needs of their customers. PMMI organizes the PACK EXPO trade shows: PACK EXPO International, PACK EXPO Las Vegas and EXPO PACK México. Learn more about PMMI at pmmi.org.