The value of domestic shipments of packaging machinery is projected to grow at a compound annual growth rate (CAGR) of 2.4% reaching $8.5 billion in 2020, according to PACK EXPO owner and producer PMMI, The Association for Packaging and Processing Technologies, Reston, Va.

PMMI produces the State of the Industry study based on U.S. Census Bureau reports and shipments data provided by association members who manufacture packaging machinery. The report, which analyzes 28 packaging machinery categories, describes trends and the outlook for packaging machinery shipments through 2020.

More than half of this growth is expected to come from the food and beverage sector, according to the report, “2016 State of the Industry U.S. Packaging Machinery Report.” For example, the value of domestic shipments of U.S.-produced machinery rose 0.3% to $7.51 billion in 2015. Exports of packaging machinery in 2015 increased by 3.2% compared to 2014 and are now $1.1 billion. Backlog orders of packaging machinery grew by 14.1% compared to backlog orders at the end of 2014.

According to the report, the labeling, decorating and coding and case handling machinery groups are forecast to increase the fastest of all machinery types through 2020, at CAGRs of 3.9% and 2.5% respectively. This is followed by the beverage sector, which is forecast to grow at a CAGR of 2.4%.

“The forecast for the packaging machinery market is strong. We continue to anticipate growth in major market segments such as pharmaceutical as well as beverage. Factors such as changing consumer habits, new regulations as well as general economic development are fueling this development,” says Jorge Izquierdo, vice president, market development, PMMI.

In regards to machinery categories, the rapid growth anticipated in the labeling, decorating and case handling segment is largely a result of new legislation demanding increased labeling and coding, continuing developments in printing technologies and the proliferation of SKUs.