The Growing Demand for US-Made Cars Driving the Plastics Industry

Will the U.S. become an automotive manufacturing powerhouse and export machine?

A sturdy North American manufacturing sector is showing good signs in terms of market performance even if growth of the injection molding presses for the US market was only 5% in the past year. The shale-gas boom is expected to drive stability in resin pricing which could help draw more production to North America. In October, 2013, the country reached a milestone – for the first time in 2 decades, the United States produces more oil than it imports. And more importantly, the automotive sector is still buying.

A Potential Manufacturing Powerhouse

This translates to the increasing number of cars manufactured in the US being exported prompting market analysts to wonder if the US has the potential to become a manufacturing powerhouse in exporting US-made cars. It was unthinkable a few years back but in the recent turn of events, the country may just have to think about such possibility.

PMP - Plastic Machines April 2014Car-ManufacturingSolid Case In Point

A case in point is Honda USA Corporation – they exported over 20% more automobiles from the US than the number of cars the country imported from Japan in 2013, marking a record-breaking history in automotive industry. It was the first time export figures exceeded import numbers from the car’s home country by a car manufacturer’s foreign-based operations. This is a clear indication of US automobile market performance in the export sector.

Growth Driven By Demand For New Cars

According to Bill Wood, a plastics economist, the fundamentals point to continued growth and increases in employment. Indicators are all good – automotive, income and spending. But Wood perceives that there is still this pent-up demand for new cars. 

In 2013, about 15.5 million vehicles were sold in the country. Automotive analysts are projecting 16 million in 2014 which would mark a fifth straight year of growth reaching the pre-recession level. 

PMP - Plastic Machines April 2014ford-adds-900-to-kansas-city-plant000A Stronger 2014 Seen

 The strong automotive sector lifted press sales from 1,285 all the way back in 2009 to orders of 2013 reaching 3,307. Leaders of plastic machines manufacturers and other automotive component machinery are looking at an increase of about 5% to 6% from 2012. Most machinery sector leaders are hopeful that 2014 will be another strong year for the industry, anticipating growth of about 2% to 3% with a potential shift to larger-tonnage machines.

Automotive Industry-Driven Expansion

Plastics industry players are in agreement that the industry is in for expansion. Several press makers and machinery companies have machinery orders for the automotive industry booked until August, 2014.

PMP - Plastic Machines April 2014manufacturing-auto-usManpower Shortage

And many of these machinery companies as well as automotive molders are hiring new employees in anticipation of the continued increase in machinery manufacturing activities. There are a lot of projects on the bid process and there are no signs of any immediate slowing down. The rather scarce supply of technically-skilled people are getting machinery executives worried that it could impede the growth of the plastics industry. With many skilled workers retiring, replacing them with new hires has been a challenge. This problem has to be addressed in order to have enough engineers and technicians to support the expanding industry.

  

PMP - Plastic Machine - April 2014USFarathane_MachineOperator

 

Signs of a stronger and more robust U.S. market for manufacturing and automotive industries this year are pretty much all over. Do you agree?