Packaging Machinery Spending Cautiously Optimistic: PMMI

ARLINGTON, Va.—Consumer and industrial goods companies will spend approximately $6.304 billion for packaging machinery in 2008, a 0.6% increase over 2007, according to PMMI’s 2008 U.S. Packaging Machinery Purchasing Plans Study.

The PMMI study is based on interviews with 511 decision makers responding for 1,564 plants in the U.S.

According to PMMI’s research, only two of the eight tracked market segments—foods and personal-care products—will show growth this year. The remaining six categories—beverages; pharmaceuticals; personal-care products; chemicals; consumer, commercial and industrial durables/hard goods; and paper products, textiles and other non-durables—show moderate declines, but with slight potential for growth, the trade association said.

“PMMI members’ customers reported they are holding steady with their packaging machinery spending plans for 2008, despite weakening economic conditions,” said Charles D. Yuska, president & CEO of PMMI. “With 85% of the respondents expecting to buy roughly the same amount or more than they did in 2007, we expect some market segments to be fine, with other groups feeling a tightening as consumer goods companies wait out the current economic quarter.”

According to the study, 39.8% of respondents said replacing older equipment to improve speed, productivity and efficiency was a deciding factor in their purchasing decisions. Adding new packaging machinery to accommodate new products was cited as a factor by 36.2%, and adding new packaging lines to increase production was noted by 35.3%. Fully 34.4% of respondents said adding packaging line automation was a major factor in their purchasing decisions. Replacing older equipment to improve uptime, reliability and maintenance costs was cited by 32.6% of respondents.

“Even with difficult economic conditions triggering fewer decisions to buy, we expect companies will see the strong value in replacing older equipment to ensure they maximize production capacity and ultimately lower costs,” said Yuska. “We are confident that PMMI member companies are positioned well to weather the current economic conditions given the strong value propositions they deliver in the areas of reliability, productivity and solutions focus, all important buying criteria for today’s consumer and industrial goods companies.”

This spring, PMMI will issue its first-ever supplement to the U.S. Packaging Machinery Purchasing Plans Study. The supplemental report will re-examine projections in light of rapid economic changes during the first quarter of the year. Interviews are scheduled for March and April.