PMMI predicts a year of mixed fortunes

PMMI’s 540 machinery manufacturing member companies are bracing themselves for a plateau year as far as generating new equipment sales with total spend likely to level out at $6.3bn – a fractional 0.6% uplift on 2007. Sluggish trading conditions, however, have to be viewed within the overall context of a flat US economy, with GDP only forecast to run at 1 – 2% and with most gains coming through during the second half of the year.

US consumer fears about a worsening economic outlook overshadowed by the developing credit squeeze crisis are bound to have an adverse effect on both food and non-essential FMCG expenditure. On a more positive note, however, US manufacturers can look to their existing and potential export markets with increased confidence throughout the remainder of the year due to the low rating of the dollar against other currencies.

Of eight targeted sectors covered within the association’s annual market intelligence report, only food (up between 2 – 4%) and personal care (up between 0 – 2%) are showing growth during FY ’07. Whilst there are indications of a longer-term potential for recovery, the other six sectors: beverages; pharmaceuticals; chemicals; commercial & industrial durables / hard goods; paper products & textiles, are all showing varying degrees of decline from between 1 – 3%.

Based on the findings of an in-depth survey conducted amongst over 500 + senior managers representing 1564 different plants throughout the US, Yuska identified the following deciding factors in formulating decisions to purchase new equipment:

39.8% looking to replace older machinery in order to improve speed & efficiency
36.2% looking to re-equip in order to accommodate new products
35.3% looking to add new lines in order to increase production
34.4% looking to add enhanced automation
32.6% looking to improve uptime, reliability and reduce maintenance costs