Despite record-low machine capacity utilization last year, custom injection molders’ machine-hour rates held more or less even. Responses by 85 plants to our semi-annual survey (conducted in cooperation with Townsend Solutions of Houston) nudged our Hourly Rates Index up barely 0.3 percentage points from June to December, the same as we recorded for the first six months of 2009. Twice as many respondents increased hourly rates as decreased them in the second half (16% vs. 8%), while 76% left them unchanged—precisely the same results as in the first half of ’09.
Average capacity utilization in December jumped 4.4 points to 52%, higher than in the prior 12 months, but lower than in June 2005 through June 2008. Over 34% of molders had higher utilization (a little more than in June) but almost 45% had lower utilization (a bit fewer than in June), while 21% had no change.
New mold orders continued to decline by 8.3% in the second half, according to 35 mold shops reporting. That’s better than the double-digit drops in two preceding six-month periods.
Molders’ optimism was growing: 63.5% expected better business conditions in the near term, while 31% expected worse. Both figures were higher than in June, but much more so for the optimists.
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Let’s take another look at this seemingly dull but oh-so-crucial topic.