Mold Builders Enter 2012 with Strong Optimism

Everything heard on the street about what a good year 2011 was for mold manufacturers seems to be rolling over in 2012 according to the latest results from the American Mold Builders Association in their Winter 2012 Business Forecast Survey. Excellent current business conditions jumped 10 percentage points to 25% for survey respondents, from 15% for the same period a year ago. Current business conditions are good for 60% of the survey respondents, up 4 percentage points from a year ago, and fair for 15% -- down 5% from the Winter 2011 survey. Even better news is that no respondents said business is “poor” or “bad.”

“This can keep going for the next 10 years!!!” one respondent wrote, obviously wanting the good times to keep on rolling.
                
Projections for business over the next three months were positive as well, with 4% of the respondents projecting that business will “increase substantially;” 35% project that business will “increase moderately;” and 52% say they expect business to “remain the same,” an increase of 12% from the Winter 2011 survey report. Only 9% expect business to “decrease moderately,” a drop from 11% in the year earlier survey. No one projects business to “decrease substantially.”
                
When comparing their current level of business with that of three months ago, 27% of respondents said that quoting is up, a drop from 37% that saw an increase in quoting a year ago. Quoting remains the same for 49% of the respondents, compared to 41% a year earlier, and down for 24% of the respondents (22% in the Winter 2011 survey).
                
Shipments are up for 35% of the respondents; the same for 51%, and down for 14%, nearly where they were for respondents to the Winter 2011 survey.

Backlogs are up for 37% of respondents, which is always good news for moldmakers; the same for 36% of the respondents, and down for 27% of respondents.

Profits are another critical area for mold companies and 32% of the respondents to the Winter 2012 survey say profits are up, compared to 24% in the Winter 2011 survey. Profits are the same for 54%, compared to 56% a year ago; and down for 14%, compared to 9% a year earlier.

Employment is up for 36% of the respondents; the same for 62%; and down for only 2% of this survey. Work-week hours for shop employees stands at 49, and 48 hours for design and engineering employees. While employment is up, the numbers show that there’s been no difference in the current number of shop employees over the past year – 22 – or in the number of design and engineering employees which remains at five.
One respondent commented, “We need to find qualified help for taking on larger tooling packages. We went through two apprentices in the last year that didn’t have what it takes, but had to try as there doesn’t seem to be anyone interested in moldmaking.”

The sentiment in the industry seems to be as another respondent expressed it: “We need to do everything possible to attract people (young and talented) into this trade.”

A large majority of respondents purchased new equipment in 2011 – 82% -- and of that number only 29% said they purchased it to get the accelerated depreciation that was set to expire on Dec. 31, 2011. One respondent expressed the hope that “we can get the government to extend the accelerated depreciation to stimulate our manufacturing in the USA.”  

Most of the respondents spent under $100,000 for their equipment (34%); 25% spent between $100,000 and $250,000; 26% spent $250,000 - $500,000; 11% spent between $500,000 and $1 million; and 4% spent more than $1 million on equipment in 2011.

Generally, things in the industry are improving, with some respondents anticipating “increased volume” in 2012. Getting more business and new customers is on the minds of many mold company owners. One respondent purchased a competitor shop and moved its equipment and their employees to his facility as a way “to gain new customers.”