AMBA Quarterly Business Survey Shows Moldmakers are Optimistic

An American Mold Builders Association (AMBA) webinar reveals a mostly optimistic outlook for the first quarter of 2018 but workforce development remains the topmost challenge.

In a February 8 webinar hosted by the American Mold Builders Association (AMBA), Executive Director Troy Nix described the survey results from the organization’s latest quarterly business survey as “lackluster” in some areas and “optimistic” in others. “The purpose of this survey is to answer the question, ‘How’s your business?’,” Nix says. “We wanted to know if the data collected reinforces or contradicts our members’ gut feeling, so we spent six weeks polling members and some secondary non-members to find out.”

Falling under the “lackluster” heading were employment level trends for the current quarter versus Q4 2017. Nix says employment levels are up for 29 percent of respondents, about the same for 67 percent and down for only four percent. Also lackluster were the numbers indicating work backlog and quoting for the current quarter versus three months ago (see chart, above). There is barely any difference. “I don’t like it, but again, comparing that to 2016, it’s not too bad,” Nix says. 

Current State of Business

Regarding the current state of business, Nix says, ““Smaller companies (under $1 million in revenue) tend to have either fair or bad business conditions.” He adds that work hours are currently strong with an average of 50 hours per week for shop floor employees and 45 hours per week for design and engineering staff. Business is expected to increase at least moderately over the next three months for 62 percent of respondents while 37 percent say that expect levels to remain the same. Additionally, 64 percent of respondents say that current profit levels are great or at minimum acceptable. “Overall, it is looking pretty positive,” Nix says.

End Markets

Looking at end market predictions, Nix says, “One of the things we saw here when we were slicing and dicing the data is that size matters when it comes to market projections and where you put yourself on the scale here.” He explains that medium to larger mold builders have a better view point with automotive. Saw a mirroring effect in the plastics industry where 46% of injection molders servicing automotive were optimistic. “Last year Automotive News said that production of light trucks and light vehicles fell about 1.8 percent, whereas SUV’s now own two-thirds of the market share, and that could be the difference between companies that are more positive and those who aren’t. Again, it depends on where you sit as a supplier within the automotive market.” Nix also noted that shops with annual sales of less than $5 million were more likely to have faith in the consumer products and automotive sector than those shops larger than $5 million.

Top Challenges: Workforce Development is No. 1

The AMBA survey shows that 100 percent of respondents chose workforce development as their number one challenge. “We have a major issue here when 75 percent of companies surveyed say they’re hiring, five percent are not, but 100 percent of shops are saying they can’t find qualified candidates to hire,” Nix says.”Couple this with expectation that business is going to increase at least moderately for the majority of companies and we now have a much larger issue.” One of five live polls taken during the AMBA’s webinar showed that 86 percent of shops have an in-house apprenticeship program. Also, 70 percent are teaming with local high schools; 65 percent are teaming with local colleges and tech schools; 16 percent are active on school boards and helping develop curriculum and only eight percent are not very involved with workforce development initiatives.

“The second biggest challenge is how to diversify. We know that 40% of our respondents are looking at this,” Nix says. “Seventy-three percent of respondents are serving the automotive marketplace and maybe a couple of other markets, but I think the question is we have to protect ourselves from these ups and downs and try to level the load a little, so where do we go and how do we do it?”

Plastics Processors Polled

Nix shared data from a plastics industry poll that asked 164 processors where they are acquiring their tooling from. “Results are subjective, but customers polled about looking for mold suppliers off-shore has shown a reverse trend from years past with the majority either not looking or trying to re-shore,” he says, adding that only three percent are aggressively looking to off-shore work and 17 percent are moderately looking, so there is a lot of opportunity there for U.S. moldmakers. “This is wonderful. If anyone were to ask me if re-shoring is for real, I would say heck yeah, it’s for real.”

He adds that processors showed a strong fourth quarter in 2017 and like moldmakers, they’re hiring. “Everyone is fighting for the same resource: human bodies.”

Plans to Improve

Nix says that when it comes to how they plan to improve, moldmaking companies said they are either increasing capacity with new machinery or making continuous improvement efforts with the equipment they have. Rising healthcare costs are the next challenge, followed by continuous improvement. “We correlated improvement with the fact that people need capacity and if they are not going to invest in capital then how can they do things better and faster with what they have?” Nix says. He also warned attendees to be mindful about not just the cause, but the effect of continuous improvement efforts, saying, “When you get better and are moving product through your shop faster, then having that backlog becomes more and more important. With freed up capacity comes more pressure on your sales team to fill that void with new orders.”

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