PMMI Economic Forecast for the Packaging Industry

PMMI recently released its Quarterly Economic Outlook, 3rd Quarter 2010 Report. Their findings conclude that they project Accelerating Growth for our industry. To that end, they are recommending companies to set the following objectives:

1. Accelerate training

2. Check the process flow for possible future bottlenecks

3. Continue to build inventory

4. Increase prices

5. Consider outside manufacturing sources if internal pressure become tight

6. Find the answer to “What next?”

7. Open distribution centers

8. Use improved cash flow to improve corporate governance

9. Use cash to create new competitive advantages

10. Watch your debt-to-equity ratio and ROI

11. Maintain/pursue quality: don’t let complacency set in

While I agree with PMMI on many of their suggestions, I read their indicators slightly differently and recommend caution for the short term. Looking at the growth charts in their report, I believe we still have some downward trending to go in machinery shipments before the recovery starts back up. On the positive side, I believe we will see some immediate growth in machinery exports.

My personal recommendations would be to follow their objectives numbered 1, 2, 5, 9, 10, and 11. I recommend caution on numbers 3, 4, 7 and 8 and I find number 6 amusing. If any of us had the ‘crystal ball’ to know the answer to ‘what next’, we would be the future Bill Gates. However, we should try to determine what that will be as the future health of our companies depend on our staying on top (if not ahead) of the direction the industry is headed.

The author, Marge Bonura, is the Director of Sales & Marketing for New England Machinery, Inc. (NEM). NEM is a leading manufacturer of bottle unscramblers, cappers, orienters, retorquers, lidders, pluggers, pump sorter/placers, scoop feeders, hopper elevators and much more. The company has been in business since 1974 selling to the food, beverage, pharmaceutical, personal care, chemical, household products, automotive and other industries. For more information on NEM, visit their website at http://www.neminc.com/.