Adhesives Magazine

Ahead of the Pack

November 1, 2007
U.S. packaging machinery shipments eclipse $6 billion for first time.



U.S. packaging machinery shipments reached $6.110 billion in 2006, a 6% increase from the $5.765 billion in equipment shipped in 2005, according to PMMI’s 2007 Shipments and Outlook study. This marks the fifth consecutive year of industry growth since 2001.

Sixteen of the 17 machinery categories that PMMI monitors in this annual report experienced growth in 2006. Two categories, wrapping (+18.6%) and capping, overcapping, lidding and sealing machinery (+11.2%), enjoyed double-digit growth. Converting machinery was the only machinery category with a modest decline of -0.6%.

Exports of packaging machinery surpassed the $1 billion mark for the third consecutive year with $1.012 billion in equipment sold overseas, an increase of 0.5%. U.S. domestic demand, which includes domestic shipments and import figures, increased by 8.4% to $6.637 billion in sales. Domestic shipments were up 7.2% to $5.098 billion and imports were up 12.6% with $1.539 billion in sales.

“U.S. domestic demand for packaging machinery has been particularly strong for the past three years, with 9.8% growth in 2004, 7.6% growth in 2005 and last year’s 8.4% growth,” said Charles D. Yuska, PMMI president and CEO. “While things have slowed in 2007, capacity levels remain high, and we expect consumer goods companies to continue their past buying patterns at slightly moderate terms.”

2006 Growth Factors

The following growth factors supported the strong industry growth in 2006.
  • U.S. companies’ increased focus on manufacturing/packaging cost reduction and productivity improvement to combat rising labor, energy, and raw-material costs.
  • Continued strong cash positions among U.S. corporations.
  • Increased need for highly flexible packaging machinery to accommodate shorter packaging runs with a widening range of packaging styles, sizes and configurations.
  • Greater demand for turnkey packaging system projects (total line solutions).
  • Favorable reception to new machinery introductions with advanced features and benefits, including robotics, servo technology, faster speeds, greater packaging precision, easy packaging-line integration, touch-screen user controls, and smaller footprints.
  • Demand for machinery upgrades due to packaging format changes to support consumer-marketing efforts.
  • Attention made to product tracking and labeling, as well as continued pressures to add package security features to protect product integrity, prevent counterfeiting or product contamination.
“Over the past few years, PMMI has been working closely with its members to keep up to speed on the changing marketplace, and to ensure they are delivering value beyond the machinery solutions they create,” Yuska said. “The sales numbers PMMI members are posting are clear indicators that they are meeting the needs of the customer community and are poised for long-term growth.”

2007 Shipments to Moderate

U.S. packaging machinery shipments are forecast to grow at an average annual rate of 3.1% over the next three years, increasing from $6.110 billion to $6.689 billion by 2009. 2007 growth is expected to be essentially flat, at 0.5% growth.

Market Considerations

Growth rates for 2007 and beyond depend on a number of economic factors, including the following.
  • U.S. Gross Domestic Product is forecast to grow by 2-2.5% in 2007, followed by stronger increases in the range of 2.8-3.2% in 2008 and 2009.
  • Overall U.S. manufacturing capacity stands at 80% as of June 2007. Capacity usage at non-durables manufacturing plants, where the majority of shipments come from, stands at 82% as of June 2007, the generally agreed-upon trigger point for meaningful expansions.
  • Machinery demand from overseas markets, including China, Brazil, India, Russia and Eastern Europe, will grow.
  • U.S. corporate profits will remain relatively solid, but companies will take a careful look at economic conditions, especially the impact of the housing market.
An executive summary of the 2007 Shipments and Outlooks Study is available at www.pmmi.org/a/article.asp?id=1796&navitemid=623. For the complete study, contact Paula Feldman, director of statistics, at (703) 243-8555 or e-mail paula@pmmi.org.

PMMI’s 500+ members manufacture packaging and packaging-related converting machinery in the United States and Canada. PMMI’s 32 supplier members manufacture commercially available packaging machinery components. PMMI’s vision is to be the leading global resource for packaging. Its mission is to improve and promote members’ abilities to meet the needs of their customers. Visit www.pmmi.org for more information.


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