Average custom injection molding machine-hour rates rose 1% from Dec. 2006 through June 2007, according to responses to our latest semi-annual survey by 88 molders nationwide.

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Average custom injection molding machine-hour rates rose 1% from Dec. 2006 through June 2007, according to responses to our latest semi-annual survey by 88 molders nationwide. However, this occurred while molders’ machine capacity utilization was dropping, mold orders were falling, and molders’ optimism about near-term business conditions were fading.

Average hourly rates rose for the fifth survey in a row since mid-2005. However, as is usually the case, the vast majority of respondents—76% in this case—did not change their rates at all. Some 17% raised their rates (vs. 21% in the previous survey) by an average of 9%, and 7% lowered their rates (vs. 4% previously) by a similar amount.

Prospects for raising hourly rates in this second half might be reduced by the decline in average capacity utilization to 57% from 59% at the end of last year. Capacity utilization was highest in the Northeast and lowest in the South Central region. This was the first decline since the end of 2004 and follows a leveling off of utilization in the second half of 2006. Interestingly, more molders (46%) said they increased their capacity utilization in the first half of the year, while 31% lowered their rates and 23% saw no change.

New tooling orders, reported by 54 mold shops, fell 2.1% in the first half, the second drop in a row and almost twice the rate of decline in late 2006.

 

Optimism weakens

Optimists about the trend in near-term business conditions still outnumber pessimists, but by a thinner margin. Around 41% of respondents saw conditions improving (down from 52% at the end of 2006) while 30% saw conditions worsening (up from 16%), and 28% were neutral in their forecast. Optimism was most prevalent in the Northeast and West and was weakest in the North Central industrial heartland.

(Note: All interested custom molders will be able to answer the next survey—early in January—online at our website, www.ptonline.com.) 

 

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
Without ProfitWithout OperatorWithout Either
<10012.6%17.6%31.7%
100-2998.7%13.3%26.3%
300-4997.2%11.1%21.8%
500-7495.7%9.3%18.6%
750-9996.5%13.3%21.3%
1000+5.4%10.2%17.8%
a Cumulative national averages over many surveys.

 

CUSTOM INJECTION MOLDERS' MACHINE-HOUR RATES 
WITH OPERATOR, PROFIT MARGIN INCLUDEDa (88 PLANTS)

Dollars Per Hour (High/Average/Low) 4th Quarter 2006
Tonnage Range<5050-99100-299300-499500-749750-9991000-14991500-19992000-29993000+
Indexb
Northeat
(ME, NH, VT, MA, CT, RI, NY, NJ, PA)
$75..00$75.00$80.00$90.00$100.00$102.30

 

 

 

 

 

$43.71$40.76$43.22$54.71$70.47$87.35 

 

 

 

84
$15.13$15.13$19.79$29.10$40.74$75.66 

 

 

 

 

Southeast
(DE, DC, FL, GA, MD, NC, SC, VA, WV)
$45.00$102.30$109.12$58.20$100.00$110.00 

 

 

 

 

$34.32$41.49$45.75$45.53$67.92$61.86 

 

 

 

79
$24.55$20.46$23.19$25.92$28.64$31.37 

 

 

 

 

North Central
(IL, IN, MI, OH, WI, IA, KS, MN, MO, NE, ND, SD)
$80.00$64.11$98.84$150.08$177.32$115.94$120.00$162.38$250.88$335.67

 

$31.82$33.62$43.19$58.01$72.52$91.01$100.92$141.32$215.23$253.84
79
$20.46$16.37$24.55$32.05$36.68$61.38$90.79$125.00$175.00$192.91

 

South Central
(AL, KY, MS, TN, AR, LA, OK, TX)
$43.10$47.74$54.15$62.31$75.00$80.00$94.13$94.13$94.13$94.13

 

$28.75$30.50$39.04$47.37$56.11$64.35$73.48$70.45$94.13$94.13
68
$13.64$13.08$29.10$35.46$40.74$40.74$40.74$40.74$94.13$94.13

 

West
(CA, OR, WA, AK, HI, AZ, CO, ID, MT, NV, NM, UT, WY)
$104.76$116.40$122.22$88.66$75.00$93.91$146.38$192.06$226.98$256.08

 

$48.43$50.64$57.75$60.16$65.41$86.74$121.26$158.10$226.98$256.08
100
$13.97$16.30$18.62$41.66$58.20$79.56$96.14$124.14$226.98$256.08

 

National Averagec$37.67$38.83$45.54$55.21$68.66$83.71$102.04$134.70$210.98$199.43

 

Average Change in Hourly Rates In First Half 2007: +1.0%
a An adjustment factor is used where data do not already include profit and labor. b Relative to highest-cost region (which equals 100); value shown is a weighted average for all size ranges. c Weighted geographically according to Plastics Technology's Manufacturing Census.