Packaging machinery sales to stabilize

Mary Ann Falkman, Editor-In-Chief -- Packaging Digest, 6/1/2007

The U.S. domestic demand for packaging machinery is projected to level off this year to an estimated value of $6.27 billion, according to the U.S. Packaging Machinery Purchasing Plans Study, published by the Packaging Machinery Manufacturers Institute (www.pmmi.org).

Except for the economic downturn that started in 2001, North American machinery manufacturers have experienced strong growth over the past five consecutive years. This year's forecast of 1-percent growth represents a cautious reaction to the uncertainty of the U.S. economy, rather than decisions based on financial imperatives, PMMI reports. However, certain market segments will do somewhat better than the aggregate average, most notably the pharmaceutical/medical sector, which should see machinery sales increase 2 percent to 4 percent, and food growing at 1 percent to 3 percent.

The 468 packagers who responded to the PMMI survey indicated that some market trends could lead to machinery orders. One is the increased focus on improving packaging-line efficiency and productivity. Another is the need for increased flexibility to handle more package types and quicker changeovers. Also noted are escalating concerns about product security and tracking, the use of packaging as a retail competitive differentiator and the still-growing emphasis upon convenience packaging.

Dampening the prospect of increased machinery sales are end-users' strategic cost-cutting initiatives, such as plant closings to improve profits and packagers' plans to expand into emerging markets. The shift of production to lower-cost overseas markets is expected to continue through 2007, also impacting the need for capital spending on packaging machinery.