For plastics machinery, 2019 will be a challenging year, especially for injection presses, the biggest equipment category and a bellwether for the overall plastics industry.

Thanks to tax reform, 2018 started with a lot of excitement in the equipment market. The big news was the immediate, 100 percent depreciation of capital investments for U.S. processors. This was supposed to spur machinery sales. Some experts even expected it to supercharge investment.

But the days of processors buying machines in a speculative fashion, for business they expect to come, seem to be over. Now processors don't order injection molding machines unless they have orders in hand. Other machinery sectors with much longer lead times, like blown film lines, are more insulated from that harsh reality.

The U.S. injection molding machine market held up in 2018, probably reaching the 4,000-unit level for shipments for a fourth year in a row, according to industry officials. Shipments probably dropped modestly, around 5 percent, they said.

But what about the coming year? The automotive sector is the wave that lifts all boats when it comes to injection molding machinery. U.S. light vehicle sales have been at 17 million units for several straight years, and that high level has sparked investment in big-ticket, large-tonnage presses. But that glory period looks to be ending, with a modest decline expected in 2019. Already, large-tonnage machine sales were down this year, several industry officials said.

Some other issues that will impact machinery sales in 2018 include:

Tariffs and trade

The backdrop for plastics equipment — and indeed, the entire U.S. manufacturing sector — is a trade war that consumed most of 2018. This included tariffs against Chinese goods and retaliation by China, tariffs on steel and aluminum which are the building blocks of machinery and molds, conflict over the North American Free Trade Agreement and threatened U.S. tariffs on automotive imports.

President Donald Trump cranked up the volume — and the tweets — about global trade issues. Everything hitting at once caused uncertainty that dampened press buying for a few months around mid-year while plastic processors tried to figure it all out. Costs increased for components, molds and machinery from China.

Early next year, NAFTA may be replaced with the United-States-Mexico-Canada Agreement. That could return some stability to North American manufacturing.

The economy and the environment

All eyes will be on the U.S. economy and, as the recent swoon in stock markets around the world shows, the global economy. Yes, United States manufacturing is largely still intertwined with the rest of the world.

The fundamentals of the U.S. economy remains strong. Unemployment is just 3.7 percent — the lowest in nearly 50 years — and people are getting pay raises.

Investors are looking closely at what the Federal Reserve Board will do about interest rates. If rates go up, higher mortgage rates will impact the construction sector, a major market for plastics that includes extruded window profiles, vinyl siding and pipe.

Most injection molding machinery executives interviewed for our story said presses sold for new capacity far outweigh those sold for replacement. But as new machinery sales come under pressure from a slowing automotive sector, replacement sales will become more important, as well as the always-significant parts and service.

Packaging continues to be a growing area for plastics. But the main question is whether negative publicity about single-use plastics will begin to impact the market, including machinery sales.

Plastics remains a growing industry, full of innovation and forward-thinking people. Those attributes will be even more important in 2019, a year of change.

You can read all the details this week in our machinery outlook package. Plastics News reporters Bill Bregar and Audrey LaForest interviewed 40 machinery company executives for the stories on Page 1 and Pages 8-13.