2008 Saw Rare Decrease in U.S. Packaging Machinery Shipments
U.S. shipments of packaging machinery decreased by 0.4 percent to $5.885 billion in 2008, the first decrease in seven years, according to the Packaging Machinery Manufacturers Institute (www.pmmi.org), Arlington, Va.
““Given the state of the economy, it should be no surprise that shipments were down in 2008. 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.””
- Charles Yuska
Export growth of 8.6 percent was tempered by a 2.5 percent drop in domestic shipments. PMMI’s annual state-of-the-industry report, released in September, is based on data supplied by PMMI member companies and other industry sources.
Domestic shipments of packaging machinery were $4.680 billion; exports totaled $1.2 billion. Imports also increased slightly, up 1.2 percent, with $1.7 billion in equipment entering the U.S.
Adding domestics and imports, PMMI figures U.S. demand for packaging machinery was down 1.2 percent in 2008, with domestic shipments and imports totaling $6.419 billion.
“Given the state of the economy, it should be no surprise that shipments were down in 2008,” said Charles Yuska, president/CEO of PMMI. “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.”
In terms of individual categories of equipment, seven of 18 categories grew:
- Pre-made bag hanging, opening, weighing, filling and closing machinery (+7.9 percent)
- Filling – Dry Products (+3.8 percent)
- Palletizing, Depalletizing and Checkweighing Machinery (+3.3 percent)
- Case and Tray Forming, Packaging/Unpacking, Closing and Sealing (+2.8 percent)
- Inspecting, Detecting and Checkweighing (+2.6 percent)
- Cartoning, multi-packing and Leaflet/Coupon Placing (+1.4 percent)
- Conveying, Feeding, Orienting and Placing (+0.2 percent)
The association cited a number of factors that made 2008 so tough:
- 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.
- Manufacturing plants’ capacity utilization rates stood at roughly 68 percent.
- Financial conditions caused banks to significantly tighten lending practices.