Moldmakers Continue to Be Optimistic in 2011

Overall, optimism rules.

Optimism seems to be the pervading outlook according to the American Mold Builders Association Winter 2011 (fourth quarter) Business Forecast Survey. Business continues getting better for the majority of respondents. The quarterly survey revealed that current business conditions improved significantly over the previous three months, with 15% of the respondents saying that business is “Excellent” – up three percentage points from the Fall 2010 survey, double the number of respondents who reported excellent business conditions in the Summer 2010 survey. This is the best percentage for this category in several years, continuing a trend for the last three quarters of 2010. A total of 40% of the membership responded to this recent survey.

Current business conditions were “Good” for 56% of respondents, an uptick of three percentage points. That is up a full 21% over the last three quarters of 2010 as the outlook continues to move in the right direction. “Fair” business conditions exist for 20% of the respondents compared to 27% of the respondents in the Fall survey. Those reporting “Poor” business conditions moved one percentage point higher, to 6%. For the fourth consecutive survey, no one reported “Bad” business conditions.

Projections of their company’s business over the next three months – the first quarter of 2011 – shows that optimism continues to be strong. While only 6% of the respondents expect business to “Increase Substantially” – the same as the Fall 2010 survey, those expecting business to “Increase Moderately” however, increased once again to 42% from 35% in the Fall  survey.  Respondents expecting business to “Remain the Same” came in at 40%, down from 44%, in the Fall survey, showing signs of an increase. That is evident with respondents expecting business to “Decrease Moderately” dropped four percentage points to 11% from 15% in the Fall 2010 survey – the same as the Summer 2010 survey.  Only 1% of the respondents expect business to “Decrease Substantially.”

When asked to compare their company’s current level of business with that of three months ago, responses indicate some movement in a positive direction:
    Quoting activity once again ticked Up by one percentage point to 37% of the respondents to the Winter 2011 survey; the Same for 41% of the respondents, down from 49% in the Fall 2010 survey; and Down for 22% of the respondents. Comments from several respondents noted that while quoting continues to be strong, purchase orders are slow in coming, indicating that some of the  uncertainty we keep hearing about among the OEM community is playing out in a reluctance to commit to new mold purchases. One respondent said, “Customer future commitments are at an all time high, however job releases are increasingly slow,” confirming some of the angst that still exists in manufacturing.
Shipments are Up for just 33% of the respondents, compared to 48% in the previous quarter’s survey, but stayed the Same for 49% of respondents, compared to 37% in the Fall survey; and Down for 18% of the respondents, compared to 15% from the Fall survey.  

Backlog is Up for just 33% of respondents compared to 41% of the respondents in the Fall survey. Backlog is the Same for 49%, compared to 33% in the Fall survey; and Down for 33%, a big increase from the 26% of the Fall survey. These numbers would indicate that backlog is see-sawing a bit from quarter to quarter, again revealing some uncertainty in the markets.
Profits in the Winter survey are Up for 24% of the respondents, an uptick of two percentage points from the Fall survey, and showing some rebound toward the 29% in the Summer survey who reported profits had improved. Profits are the Same for 56% of the respondents, down nine percentage points from 65% in the Fall survey, but still up from the 47% in the Summer survey that reports the Same. Profits are trending Down for 20% of the respondents to the Winter 2011 survey, up considerably from the 13% of the respondents to the Fall survey.

Employment levels are also confirming that responding companies are much busier in the Winter 2011 quarter, with employment once again trending Up for 30% of respondents from 28% of the Fall survey respondents. Employment numbers remained the Same for 62% of the respondents. Employment is Down for only 8% of the respondents, compared to 7% of the respondents in the Fall survey. This continues on a significant “positive” trend for the last three quarters.

However, several comments from respondents are revealing that good help is hard to find. “Hard to find qualified apprentice prospects,” said one respondent, adding, “They need to be engineering minds that can/like to work with their hands and these types aren’t around much in today’s electronic world with college touted as the be all to end all.”

Another respondent echoed that: “Having trouble finding a new apprentice.” Yet another respondent noted that they have “one apprentice in the program, another getting ready to enter the program,” while yet another respondent said they “hope to hire apprentice(s) in 2011.” The total number of apprentices that respondents have is 75, with 41% saying they do currently have apprentices.

Shop hours are up by one hour/week to 48 in the Winter 2011 (fourth quarter) survey. For design and engineering employees, hours are up by two to 48 in the Winter 2011 survey compared to the Fall survey. The current number of employees remained at 22 for shop employees and 5 for design and engineering employees, the same as the Fall survey.

Overall, optimism rules. Several respondents report that business is “looking better.” One said, “Overall it’s better now than the last 10 years. However it has a long way to go to be like it was prior to free trade with China. See how many apprentices want to get into the trade?”