Exports grow 10% in 2006; overall shipments up 5-6%: PMMI annual shipments & outlook study indicates market growth in 2006.

Shipments of United States made packaging machinery grew 10% in 2006, partly on a favorable U.S. Dollar exchange rate, while overall growth of packaging machinery grew 5-6% during year, according to an early examination of PMMI's Shipments and Outlooks Study.

With United States packaging machinery shipments reaching $5.765 billion in 2005, this data estimates a range of $6.053 to $6.111 billion in shipments for 2006. Exports are expected to reach $1.081 billion for the year.

The advanced estimate is projected on data from 330 participants, or roughly 85% of the expected final sample. The data shows that 61% of the respondents to date had higher shipments in 2006, while 33% showed a decline and 6% posted roughly the same volume as in 2005.

"The export growth marks the third year in a row that U.S. shipments have eclipsed the $1 billion mark," says Chuck Yuska, president & CEO of PMMI. "With this solid overall growth and the strong capacity utilization rates, this data could be an early indicator of sales growth in 2007."

According to the early release, the U.S. economic climate supported moderate growth opportunities for packaging machinery manufacturers in 2006, citing the following market conditions:

* U.S. GDP grew at a real rate of 3.3% in 2006, following increases of 3.2% in 2005 and 3.9% in 2004.

* Exports of U.S. goods increased by more than 10% for the year, while imports were up by less than 6%.

* Capacity utilization levels remained in the 80% range during the year for manufacturers as a whole, but hovered in the 82% to 84% range for the key foods segment.

* Overall U.S. corporate profits remained solid and cash positions remained favorable throughout the year.

* Concerns about the sliding housing market and its potential to effect the overall economy kept companies from going ahead with more aggressive spending patterns.

* Higher inventory-to-sales ratios led to production cut-backs in Q3-4.

* Foreign competitors with lower manufacturing costs--most notably those from China--exerted further pricing pressure on U.S. manufacturers.

The Annual PMMI Shipments & Outlook Study, complete with the final 2006 shipments results, analysis and forecast for the U.S. and Canadian packaging machinery markets, was made available in August, 2007.