Medical Equipment Production Growing Rapidly
Medical care spending has grown at a fairly consistent rate throughout 2014, with the annual rate of change staying between 2.1 and 2.4 percent all year. However, the month-over-month rate of change has begun to grow at a slower rate, decelerating each of the previous three months and growing at just 1.8 percent in September. That was the slowest rate of month-over-month growth since March 2013. It appears that the annual rate of change in medical care spending will grow slower as we move into 2015.
In response to the rapidly accelerating growth in medical care spending in 2011 and 2012, medical equipment production has been growing at nearly its fastest rate in a decade, showing an annual rate of close to 6 percent since the beginning of 2013. However, while the annual rate may accelerate for a few more months, it appears that we are nearing the peak rate of growth in medical equipment production.
According to the Gardner Research Capital Spending Survey, medical device manufacturers are planning to spend slightly less on machine tools in 2015 but significantly more on primary plastics processing equipment. After a significant increase in spending on molds the last two years, medical device manufacturers indicated that they would spend slightly less on them next year. However, the level of mold spending by the medical device industry will still be at its second highest since at least 2008.
For more data on the medical industry, go to gardnerweb.com/forecast/medical.htm.
Automotive Industry Still Strong
Fueled by sub-prime loans and low interest rates, consumer spending on motor vehicles and parts remains strong. In August and September, the month-over-month rate of change in spending grew faster than 10 percent, and the annual rate of change has been accelerating since February. As of September, the annual rate of change was 6.0 percent, its fastest rate of growth since October 2013. This is virtually the fastest rate of growth in spending since late 2002.
This surge in spending has led to dramatic growth in motor vehicle and part production as well. Since 2010, production has been growing at the fastest rate in nearly a decade. But, the growth in production has outpaced the growth in spending by a significant amount, so it is likely that the growth in production will decelerate in 2015 even if spending remains reasonably strong.
The automotive industry has been a significant driver of the resurgence in the U.S. moldmaking industry the last two years, and it is likely that the automotive industry will continue to drive increased mold production for the next several years. There will be an increase in vehicle launches that will require many new molds to be produced. Also, these new molds are likely to be more complex as automotive
OEMs design distinctive styling into their bumpers, taillights, and other molded parts. In fact, the automotive industry and custom processors (who perform a significant amount of work for the automotive industry) are expected to greatly increase their spending on new molds in 2015, according to our research.
For more data on the automotive industry, go to gardnerweb.com/forecast/automotive.htm.