Hourly Rates Rose in First Quarter
Custom injection molders’ machine-hour rates rose 0.9% on average in the first quarter of 2000, after holding flat in the last quarter of ’99. According to 121 processors responding to our latest quarterly survey, four times more molders raised their rates than lowered them in the quarter, but 81% of respondents left their rates unchanged.
Molding capacity utilization rose 1.6 percentage points to 66%, the highest level in a year. The highest utilization was reported by Southeastern molders, while Northeastern molders had the lowest utilization. The Northeast scored lowest of five U.S. regions for three of the past five quarters; the Southeast came in highest twice in that period (as did the South Central region). Overall, 40% of respondents reported higher utilization while 21% saw declining operating rates, and 38% had no change. The 1.9:1 ratio of improving to declining utilization is up from 1.1:1 in the previous quarter.
Mixed economic signals
Despite the signs of economic strength in the rising hourly rates and capacity utilization, two other indicators were negative. Only 48% of respondents predicted improving business conditions ahead, down from 65% in the previous quarter and the lowest percentage in 18 months. More than 20% of respondents predicted worsening business conditions, up from 7% in the previous quarter and the highest level in 18 months. Over 31% foresaw no change in conditions. For the second quarter in a row, Southeastern molders were most optimistic and South Central molders were least optimistic.
New mold orders were down for the second quarter in a row, according to 75 mold shops responding to our survey. Still, the decline of 1.3% was an improvement over the 1.9% drop in the fourth quarter.
|PROFIT & LABOR IN HOURLY RATES|
Deduct these amountsa from the figures in the larger table to arrive at rates without profit, operator, or both.
|Press Tonnage Operator||Without Operator||Without Profit||Without Either|
|aCumulative national averages over several surveys.|