Packaging Machinery Market Likely to See Slowest Growth Since 2020

The U.S. packaging machinery market, a cornerstone of manufacturing efficiency and innovation, is bracing for a slowdown in growth in 2024. According to PMMI Business Intelligence’s “2024 State of the Industry” report, the sector is projected to hit its lowest growth rate since the disruptions caused by the COVID-19 pandemic in 2020. However, industry analysts remain optimistic about a rebound in subsequent years.

Clearing the Backlogs: A Post-Pandemic Normalcy

By late 2023, most pandemic-related backlogs in machinery purchases had been resolved. These delays, which had propped up demand for the past few years, left a void in the market as companies transitioned back to pre-pandemic purchasing cycles. The result: a forecasted 2.5% growth rate for the packaging machinery market in 2024—the slowest since the pandemic.

Despite this deceleration, the 2.5% growth rate is still a positive outlier compared to the broader machinery market, which is anticipated to contract slightly in the same period. For the packaging machinery sector, this marks a downturn but not a contraction, underscoring the market’s resilience.

Factors Influencing the Slowdown

The first half of 2023 saw healthy growth, driven by the final clearing of pandemic-related backlogs, the ongoing adoption of automated solutions, and demand for innovative packaging designs. However, as the year progressed, new orders tapered off.

Several factors are contributing to the anticipated dip in 2024:

• High Interest Rates: The Federal Reserve’s decision to maintain elevated interest rates has increased the cost of financing new machinery purchases.
• Economic Uncertainty: The looming U.S. election has fostered a cautious “wait-and-see” mentality among businesses.
• Labor Market Struggles: Persistent challenges in retaining workers for production lines have slowed the pace of new investments in machinery.

These headwinds have combined to dampen growth, even as some segments of the market, such as automated solutions, remain strong.

A Rebound on the Horizon for the Packaging Machinery Market

Industry experts are optimistic about the future of the packaging machinery market, predicting growth will begin to pick up in the latter half of 2024. Companies are expected to renew their focus on investments, particularly in end-of-line automation solutions, to address ongoing labor shortages.

By 2027, the market is anticipated to reach a new peak, following what researchers describe as a typical three-year peak-to-trough cycle. This recovery will likely be driven by rising consumer demand, technological advancements, and the continuing push for sustainability in packaging.

The Role of Machinery Appraisals in the Packaging Machinery Market

As companies prepare for this anticipated rebound, machinery appraisals will play a critical role in decision-making. Accurate appraisals help businesses assess the fair market value of their existing equipment, enabling them to make informed choices about trade-ins, upgrades, or investments in new technology. By understanding the current value of their machinery, organizations can align their capital expenditures with long-term strategic goals, ensuring they are well-positioned for growth as the market recovers.

Positioning for Recovery: Embracing Opportunity Amid Market Challenges

While the packaging machinery market is poised for its slowest growth since 2020, the industry remains fundamentally strong. Temporary setbacks caused by clearing backlogs, high interest rates, and economic uncertainties are expected to give way to renewed momentum in the years ahead. With strategic investments and a focus on automation, the market is well-positioned to thrive, and tools like machinery appraisals will be crucial in navigating the road to recovery.

Contact Us Today for a free Consultation. 888-494-3433