PT Online

Custom injection molders raised their machine-hour rates an average of 1% from June to December 2007, according to responses from 93 molders to our latest semi-annual survey. Molders’ capacity utilization rose, too, despite signs pointing to economic slowdown and growing pessimism.

The uptick in hourly rates was the sixth in a row since the end of 2004. The small average increase masks the fact that 76% of respondents did not change their rates at all. But 22% did raise their rates (by an average of 6%) and 2% lowered them.

Custom molding capacity utilization also rose 1% in the second half. Utilization was highest in North Central states and lowest in the Southeast. Only 16% of molders reported higher capacity utilization in the second half, vs. 46% in the first half. It was the lowest percentage since 2000. Nearly 50% of molders saw lower utilization, vs. 31% in the first half. It was the largest proportion of declines since 2001 and the first time since 2005 that declines outnumbered increases.

Also down was molders’ optimism about business conditions. Only 31% expected improvement in the near term, vs. 41% six months earlier and 52% a year earlier. This was the lowest level of optimism in 11 years. Those who expected worsening conditions rose to 36%. It was the first time pessimists outnumbered optimists since 2000.

Meanwhile, 63 moldmaking shops reported a 10% drop in orders in late 2007. It was the third decline in a row and the sharpest six-month plunge since mid-2001.