Following a sharp advance in 2004, the U.S. packaging machinery industry added further to the upward momentum in 2005 by posting another year of stellar growth. U.S. shipments of packaging machinery (excluding parts and service) increased by $434 million or 8.1 percent in 2005 to an estimated $5.765 billion.

With few exceptions, the results were favorable across the board as reflected in higher values for nearly all measured indicators; in particular, shipments to the U.S. domestic market were up sharply while exports rose at a moderate pace. Most importantly, the number of machinery categories whose totals were up in 2005 far exceeded those in the minus column. Although much of the growth was linked to the sustained strength of the U.S. economy and improved capacity utilization, which encouraged some degree of expansion, the underlying thrust of demand was again based on end-users' efforts aimed at reducing labor costs and improving productivity. In effect, they continued to replace older packaging machines with new models featuring state-of-the-art technology and promising rapid return on investment.

Dollar-value estimates and growth forecasts presented in the 2006 PMMI Shipments and Outlook Study are based on a combination of research methodologies. Information and data came from members' questionnaire responses and from telephone interviews with non-members - an endeavor consistent with the objective of defining the value of total industry shipments.

The chart of U.S. packaging machinery shipments, 1995 through 2005, shows a predictably cyclical pattern of alternating periods of growth from one year to the next and its first period of above-average growth for two successive years. The pattern has been attributed to a number of diverse factors, some cyclical (e.g., heavy build up in capital spending for machinery during the late 1990s followed by an abnormally saturated market upon entering the new decade), and others coincidental.

U.S. manufacturers' shipments of packaging machinery to U.S. domestic market customers increased by $391 million (9.2 percent) in 2005 to an estimated $4.664 billion. The sharp gain, which followed a nearly as spectacular 8.5 percent increase in 2004, was again attributed to the sustained strength of the U.S. economy and to a concurrent improvement in capacity utilization.

For more information on the study, contact PMMI at 703/243-8555, www.pmmi.org.