Slow Economy Takes Toll on Packaging Machinery

Tag : Used Industrial Machinery


“The packaging machinery market’s performance seems tobe in line with today’s broader economic picture and theslowness all industries are facing right now,” says CharlesD. Yuska, president and CEO of PMMI.

Overall, PMMI’s updated research predicts an increase of 0.4%over 2007 in packaging machinery spending instead of the 0.6%prediction in the initial survey. That brings the year’santicipated spending to $6.292 billion, just slightly less than the$6.304 billion predicted earlier in the year.
More than half of the companies surveyed (55.6%) said they wouldnot change their purchasing plans for the year. Of the remainder,22.5% said they revised their budgets higher, while 21.9% have cutback. Mid-sized companies (six to 25 packaging lines) had thehighest rate of budget increases (25%), and larger firms (more than25 lines) had the highest rate of budget cuts (29%).

“Packagers are bringing in new machinery for two leadingreasons: to accommodate new products and to increase capacity forexisting products,” says Yuska, noting the following otherreasons packaging machinery buyers are maintaining or increasingtheir 2008 budgets.

However, weaker-than-expected demand and economic uncertainty haveled to project cutbacks, delays and cancellations, according to thePMMI report. Increasing costs for raw materials and energy spurredbudget cuts for 15.9% of the companies adjusting their plansdownward. For 10.4% of the packagers, however, those increasedcosts, which bump up the price of the machinery, are the reasonthey are increasing their budgets.

PMMI’s Purchasing Plans study also reports thatsustainability is playing a role in the decision to order packagingmachinery for 48.3% of firms. Most companies (30.5%) are purchasingequipment to improve efficiency and address energy use andgreenhouse gas emissions as well as general production costs andmaterial waste. About a quarter of the respondents (24.2%) said“sustainability” is a factor because of customerdemands.

“The most influential customers look at all facets ofpackaging sustainability when making buying decisions, sosustainability-related decisions in packaging are at leastindirectly influenced by major customers,” says Yuska.