The impact of the recession on Europe’s injection moulding sector has been documented by AMI Consulting. AMI calculated that the value of the European plastics injection moulding industry in 2008 was just over €55 bln, slumping to €42.6 bln in 2009, losing nearly 23% of its value. Up until 2008 the European injection moulding sector had been growing by around 2% pa by polymer volume, but the last quarter saw a sharp contraction in the market which wiped out nearly 5 years of growth in the space of a few months. The market is expected to start growing again in 2010 and AMI is forecasting an expansion in polymer demand in the range of 3-4% pa over the next three years driven mainly by developments in packaging applications and specialised areas like medical, healthcare and defence and by general growth in the markets of Central and Eastern Europe. The recession has served to accelerate the process of rationalisation which has been going on in injection moulding for many years now. Since
2005 more than 12% of sites have closed in Western Europe, although the number has been growing in Central and Eastern Europe. The analysis suggests that the number of moulding sites in Europe will reduce by a further 10% over the next three years. In addition to the impact of the recession which led to an increase in bankruptcies, the industry has also been affected by the retirement of owners unable to sell on their business and by plant rationalisation among the larger groups. The relocation of capacity to lower cost locations outside Europe also continues to occur, while other operators have just withdrawn from injection moulding preferring to contract out their injection moulding requirements or have refocused their activities on tooling, assembly or finishing operations or moved into non-plastic activities. The sectors which AMI has found to be most affected by these trends were suppliers to the automotive industry, particularly of small and medium sized components. Similarly small and medium sized electronic and appliance manufacturing has declined significantly in Europe and with it the moulding sector to supply it. In general it is sectors which have low growth opportunities, low specialisation and commodity pricing which are most likely to move out of Europe. The expansion of the EU has also resulted in a growing shift of moulding capacity from West to East and while the trend in Western Europe has been one of general contraction, the injection moulding sector in Central and Eastern Europe had been displaying strong growth. For the period 2005 to 2008 polymer demand among Central and Eastern European moulders grew on average by 7% pa while in Western Europe polymer consumption by moulders shrank at a rate of 1% pa. The injection moulding industry in nearly all of Western Europe declined over this period, with the exception of Germany which actually managed to sustain positive growth, in part aided by its proximity to the growing markets of Central and Eastern Europe, the relative strength of its manufacturing industries and strong consumer demand up to Q3 2008. The UK injection moulding sector has been the weakest of the major West European countries, with the market declining even during 2006 and 2007, when most other markets were growing on the back of stronger economic growth. The UK has suffered from a decline in foreign investment more attracted to the euro zone or the growing markets of Eastern Europe and significant reductions in automotive, electronics, household appliances and consumer goods manufacturing.