The industry will continue to face head winds relating to import penetration
New York, NY (PRWEB) October 19, 2014
Blow molding machinery is used to make hollow plastic products, including plastic bottles and automotive parts. Private investment in industrial equipment and machinery and downstream demand are key drivers of industry performance. Over the past five years, both of these drivers are expected to perform well, thanks to improving economic conditions following the recession. Prior to the start of the five-year period, credit dried up as a result of the recession, causing investment in expensive machinery to plummet. Declining investment caused revenue for industry participants to decline sharply in 2009. However, the five-year period to 2014 has been characterized by a solid recovery and a rise in investment in industrial equipment and machinery, as downstream users are expanding capacity.
According to IBISWorld Industry Analyst Daniel Carusotto, “While the industry has experienced solid growth over the period, structural issues continue to plague industry operators.” Like most machinery manufacturing industries, manufacturers of blow molding machines compete heavily with foreign goods. Overseas manufacturers, most notably those in Asia, enjoy looser regulations and lower labor costs. These advantages enable foreign manufacturers to produce similar products for a much lower price. Consequently, domestic manufacturers are increasingly moving production overseas, causing the number of establishments to decline. Industry operators who still operate solely in the United States are therefore attempting to distinguish their products from foreign competitors through quality.
Over the five years to 2019, the Blow Molding Machinery Manufacturing industry is expected to grow slowly. “The industry will continue to face head winds relating to import penetration, a stronger dollar and environmental concerns associated with plastic use,” says Carusotto. Despite these trends, industry operators are expected to manage annualized revenue growth over the five-year period. Improvements in downstream demand and technological advancements will ultimately force users of industry equipment to replace old machines with new ones, benefiting industry revenue. Nevertheless, despite this expected increase in demand, IBISWorld expects industry profit margins to contract slightly as foreign competition prevents operators from raising prices.
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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