Apr 28 2009
Plastics processors and suppliers alike are understandably concerned about the current business climate. But an independent study conducted last month by Townsend Solutions and Plastics Technology (PT) indicated that things perhaps aren't quite as bleak as they seem.
The joint study was conducted via separate email campaigns across the databases of Townsend Solutions, a Houston-based market research company, and PT, which is part of Cincinnati-based Gardner Publications Inc. The Society of the Plastics Industry assisted in the project by contributing its names of its processor members. The purpose of the study was to measure how the global recession is impacting the capital-investment plans of plastics processors, and to find out where processors are in terms of their plans to invest in the near future
Responses from 490 processors indicated while more than 61% have held off spending so far this year, that same percentage said they'd be ready to pull the trigger on investing as soon as business conditions improved.
The $64,000 question: when do processors expect that to happen? Based on the Townsend/PT study, the answer is not too far off. Nearly 18% said they expect to buy new primary or auxiliary equipment in the next three months, another 33% said they'd be buying within the next 4-6, and 54% of the survey respondents said they expect to buy in the next 7-12 months.
Interestingly, more than 46% of those polled indicated that they plan on purchasing molds/tooling before the end of 2009, which could suggest that new-product launches delayed by the current economic crisis may be freeing up in the near future. About 43% said they expected to invest in auxiliary equipment or software this year; more than a third said they plan to buy new primary processing equipment this year.
Other survey highlights:
- While more than 32% of the respondents said their business was "significantly declining," more than that amount (36.4%) described their current activity as stable (22.0%), slightly growing (10.7%), or significantly growing (3.7%).
- Some 25% of the processors polled said that in spite of the economy they are moving ahead with their plans to buy new equipment. Close to 50% said the economy has forced them to delay spending, while another 12% acknowledge that business conditions have forced them to cancel their investment plans.
- More than half of those polled said either they themselves or one of their colleagues would be attending NPE2009 show in Chicago, June 22-26, while another 30% said they were still considering whether or not to go.
- Processors have been aggressively cutting costs to manage their businesses during the economic crisis, but about half said they have improved processes to cut expenses, and 20% have increased automation to lower costs.