North American Plastics Processing Machinery Market

Abstract

Offshore Competition in Plastics Production Undercuts Sustained North American Growth

The North American plastics processing machinery markets are increasingly seeing a shift of production to offshore locations that offer substantially lower labor costs. Since molding processes are still largely labor-intensive, offshore production is a highly attractive proposition for manufacturers, given that hourly wages per worker are as low as 50 cents in countries such as China against an average of $19 in the United States. With other advantages such as a less stringent regulatory environment, the trend of production migration is likely to continue, creating a scenario of low to no growth for North American manufacturers.

This Frost & Sullivan research offers an in-depth analysis of the North American plastics processing machinery market. It addresses market size and growth for the total North American market as well as its three country subsegments. It also discusses prevailing industry challenges, trends, and competitive issues.

Expected Economic Recovery and Increased Substitution of Plastics Materials to Drive Market Growth

Although the period from 2000 to 2003 was one of the most challenging in the history of the plastics processing machinery markets, participants seem more optimistic than pessimistic. Manufacturers are hoping that expected economic revival in all the North American countries and increased spending on capital equipment will result in a much healthier machinery market.

Additionally, plastics are increasingly being used in applications traditionally served by metal, wood, and other materials. This is especially seen in certain key end-user industries such as packaging and automotive. This trend is likely to be a major growth driver for the plastics processing machinery markets. "Anticipated improvement in the economies of all three North American countries and the continuing growth of plastics as substitutes for other materials are expected to bring some measure of growth back to the industry during the forecast period," says the analyst of this research service.

Customer Focus is Key to Market Success

As competition mounts in the plastics processing machinery markets, a customer-centric strategy is bound to be a strong differentiator among participants. However, this strategy goes beyond merely giving good customer service by being accessible and offering timely support and information. The smart manufacturer will realize the importance of involving customers in research and development issues pertaining to machine innovations and upgrades. Such manufacturers also realize that understanding customers' markets so as to accurately address their needs at the time of production will offer a critical competitive advantage. "The market leaders today are aware of the level of customer loyalty in this market and the need to leverage it. The challenge is to do so consistently in a manner that is both supportive of customer needs and profitable for the company," states the analyst.