Investing in a Brighter Future
Package printers are following a trend of increased capital spending on new printing technology.
By Tom Polischuk
THERE ARE HIGH expectations (if not just high hopes) that 2004 will be a breakout year for the U.S. economy in general, and the packaging segment in particular. It has been a long arduous wait, especially since signs of a turnaround have been apparent for some time now. It just seems like everyone is lined up at the starting line for the race to begin, but the starter's pistol just keeps on misfiring.
A good indicator of both current business expectations and future economic performance is the capital expenditures that businesses are making, or are planning to make, in light of the present economic conditions. Some businesses wait for an upturn to be well on its way before spending money on new equipment, while others will invest in new assets so they can be ready when business picks up. Either way, current spending on capital equipment provides a good gauge on business activity in the months ahead.
Two recently completed surveys of equipment purchasing plans show that 2004 will be a year of healthy capital investment in the packaging industry. In its seventh annual Purchasing Plans Study, the Packaging Machinery Manufacturers Institute (PMMI) reports that 66 percent of the companies surveyed plan to spend as much as or more capital in 2004 vs. last year. Similarly, packagePRINTING's 14th annual Equipment Purchasing Survey had almost 90 percent of respondents indicating the same or greater level of spending in 2004.
PMMI's 2004 Purchasing Plans Study is a broad study, looking at the plans of both consumer and industrial goods companies over the full spectrum of the packaging segment. Results show that packaging machinery expenditures will increase to $5.479 billion, 4 percent more than last year.