Pandemic-related backlogs in machinery purchases largely cleared by late 2023, resulting in a decline in market growth.
PMMI Business Intelligence: 2024 State of the Industry
The saying “good things come to those who wait” rings true in a packaging machinery market forecast shared in PMMI Business Intelligence’s “2024 State of the Industry” report.
A post-pandemic return to normalcy
The market is expected to bottom out in growth in 2024, reaching a low of 2.5% growth. That’s the lowest the market has fallen since the disruptions of the COVID-19 pandemic in 2020.
Fortunately, unlike many other machinery markets, this market bottom still results in growth. The 2.5% mark is significantly higher than the forecast for the broader machinery market, which is expected to contract by low single digits in the same period.
PMMI Business Intelligence researchers predict a rise in market growth after 2024.PMMI Business Intelligence: 2024 State of the IndustryGrowth in the first half of 2023 was bolstered by the clearing of remaining backlogs from the pandemic, along with continued adoption of automated solutions and demand for new packaging styles. Backlogs largely dried up as the year continued, and new orders began to fall.
Lighter demand in the back half of 2023 continued into 2024. This, combined with the Federal Reserve’s decision to hold interest rates high and uncertainty surrounding the U.S. election, has contributed to the slowdown in growth, Business Intelligence researchers say.
A rebound in the years ahead
Looking forward into the second half of 2024, Business Intelligence researchers expect new machinery sales to begin rising again as the “wait-and-see” mentality dissipates.
There will likely be more request for end-of-line automation as many companies continue to struggle with retaining labor for production lines. The researchers predict that growth will peak again in 2027, in line with a three-year peak-to-trough cycle they say is typical in this market.
SOURCE: PMMI Business Intelligence: 2024 State of the Industry
