During the recession, downstream industries reduced spending on blow molding machinery
Los Angeles, CA (PRWEB) September 18, 2012
In the five years to 2012, the Blow Molding Machinery Manufacturing industry is expected to grow at an average 3.7% annually, including 1.1% growth in 2012, to reach $469.6 million. The moderate overall growth comes despite a steep drop in 2009 due to the recession. “Falling consumer spending that year affected the sales of downstream industry products, such as plastic bottles, which forced those industries to cut back on investing in new blow molding machinery,” says IBISWorld industry analyst Dale Schmidt. “In addition, because companies typically take out loans to purchase industrial machinery, tightened lending during the recession made it more difficult for businesses to acquire loans.” Major company Milacron Inc.’s Chapter 11 filing in 2009 is one example of the hardship industry operators endured. Fortunately, industry revenue quickly rebounded on the back of record corporate profit, though, which businesses heavily invested in industrial machinery. Revenue growth has since tapered off as companies have shifted their investing focus away from industrial machinery.
International trade has dominated the past five years. Since 2007, exports have contributed about 80.0% of industry revenue, and imports have satiated about 75.0% of domestic demand. According to Schmidt, “The rise in exports has been aided by the depreciating value of the dollar, which has fallen steadily in relation to other world currencies over the five-year period.” Meanwhile, domestic plastic product manufacturers typically look outside US borders for blow molding machinery since lower production costs abroad allow foreign manufacturers to sell at lower prices. As such, the Blow Molding Machinery Manufacturing industry is characterized by its reliance on international trade. Over the past five years, exports have increased steadily, with Germany and Canada being the industry's largest export markets. Imports have also increased each year on average; they are primarily sourced from South Korea, Taiwan, Singapore and China.
Unlike the growth experienced in 2010 and 2011, the industry will face tough growth prospects over the five years to 2017. Following their quick rebound from the recession, downstream markets will struggle to grow in earnest over the period. In addition, the rising price of steel will eat into industry profit, while the rising price of plastic resin will hamper plastic product manufacturers' ability to purchase new blow molding machines. At the same time, technological advancements will help improve the automation and efficiency of blow molding machinery manufacturing, which will help firms reduce labor costs to stay competitive. For more information, visit IBISWorld’s Blow Molding Machinery Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures blow molding machinery. Blow molding is a process by which hollow plastic parts are formed.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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