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.
[pullquote]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.
