Fear of Buying

President Bush has urged American consumers to go on about their lives, spend money, keep the economy going. That advice can’t come too soon for plastics processors anxious to get idle machines working. Our latest survey of custom injection molders showed that machine capacity utilization averaged 58% in June—the lowest we have recorded since we began the surveys in 1983.

Processors know what it’s like to clamp down on spending when times are uncertain. Not surprisingly, most of you have put capital expenditures on hold lately. SPI’s Committee on Equipment Statistics reports that second-quarter shipments of injection machines plunged 41% in units and 46% in dollars versus the second quarter of 2000. Unit shipments of extruders dropped 41%, and net bookings for auxiliary equipment were off 33%.

On a recent visit to a Midwestern supplier of injection machines, I chatted about the latest developments in all-electric presses. I asked the national sales manager how much more an all-electric machine costs today than a comparable hydraulic press. I had always heard the cost differential was 20% to 40%. He replied, “Are you kidding? What differential? Any processor with ready cash today can have the latest, greatest all-electric machine for no higher cost than a standard hydraulic press. That’s how eager suppliers are to move machines.”

Exaggeration? Maybe, but I suspect there are indeed great bargains to be had today by anyone with the nerve to spend money. Then again, how many of us dare to buy stocks when the Market has tanked—even though we know it’s the smart thing to do?