The packaging machinery sector improved during the period between 15 November and 20 December 2002, with all four measures rising above 50, and two staying above 60, according to the Packaging Machinery Manufacturers Institute's Business Conditions Index (BCI).
The official figures reveal that shipments rose 16.7 points to 69.9; new orders rose 2.3 points to 63.2; general business conditions fell 2.8 points to 57.6; quotations fell by 20.9 points to 54.8 from its record high of 75.7.
The report, specifically the growth in shipments and new orders, echoes the recently released Institute of Supply Management's 'Report on Business' which indicates that manufacturing activity rose to 54.7 from 49.2 in November, the largest increase since June of 1991.
"Companies spent considerable time and energies on new quotes and proposals following the PACK EXPO International tradeshow event held in early November, and we are now beginning to see the results of these efforts with shipments nearing 70 points and activity across the sector relatively strong, despite the holiday season," said Charles D. Yuska, president of PMMI. "This news mirrors the information released by the ISM and is an encouraging sign for the manufacturing sector."
A BCI index of more than 50 indicates an expansion in the period and an index below 50 indicates a slowdown in activity. The December BCI tabulates the input of approximately 100 of PMMI's 500 PMMI member companies. Based on PMMI's 'How's Business' survey, the index is a weekly poll of member companies. PMMI's Business Conditions Index (BCI) collects data on four business indicators: general business conditions, new orders, shipments and quotations/proposal activity on a weekly basis.
According to PMMI, packaging machinery sales, quotation activity, new orders as well as general business conditions are leading indicators for consumer goods companies' consumer confidence. If consumer products companies believe that demand will weaken, they tend to not invest in new capital equipment. If, however, they feel demand will pick up, they tend to invest in machinery that will bring their products to market quickly and efficiently.
As the packaging machinery business in Europe is closely linked to the market in the US, the new figures will come as some early New Year's cheer for the industry. However, with a precarious global economy and orders that steadily fell throughout most of last year, a continued and sustainable growth still seem a long way off.