is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

US Mold and Die Shops Can Expect Solid Growth in 2022

Image courtesy of Alamy/Quality Stock thumb's up with arm and hand painted in US flag colors
Automotive tooling spend, in particular, is forecast to reach $7 billion this year, up from $5.4 billion in 2021.

Buoyed by a revenue rebound in 2021, US mold and die shops are optimistic for further growth this year amid product launches fueled by more durable goods demand and a need for tooling for more vehicles, according to manufacturing consultant Harbour Results Inc. (HRI).

Mold and die shops saw average revenue growth of 10% year over year and utilization between 81% and 89%, Harbour found in its Q1 2022 Harbour IQ Manufacturing Pulse Study.

“Many shop owners are feeling positive about the opportunities in the year ahead," said Laurie Harbour, President and CEO of the Southfield, MI, consultancy. That’s in no small part because North American automakers “will be sourcing tooling for 66 vehicles. This is up from 46 vehicles in 2021. We forecast automotive tooling spend in the region to be $7 billion in 2022, which provides a lot of opportunity for mold and die shops.” That would be up from $5.4 billion in 2021.

While the transition to battery electric vehicles (BEVs) presents challenges, she noted that “we are seeing new vehicle programs for both BEV and ICE, and that means more tools will be needed. We will see fewer grilles on BEVs but more interior variation. We are very bullish on this decade for toolmakers, and see many new programs coming that will keep demand high.”

In terms of manufacturers’ performance, “we did see efficiency improve across the board for the tooling suppliers,” Harbour said. “The best-in-class mold and die shops — we call them top performers — leveraged several strategies: Streamlining and standardizing processes, integrating automation, leveraging scheduling software, and other tools that drove efficiency. Additionally, because the industry is facing challenges finding labor, some shops are forced to do more with less, which is driving some efficiency improvements.”

Additionally, the study found:

  • Average profitability improved modestly from 2.9% in 2020 to 3.6% in 2021.
  • Shops expect to invest between 4% to 5% of revenue in capital expenditures in 2022, likely for efficiency improvements, Harbour said.

While 2022 has started slower, Harbour’s study found, shops expect mold utilization up to 90% and die utilization up to 82% by the fourth quarter.

Ultimately, “despite all the chaos in the manufacturing marketplace” — thanks to supply chain shortages, raw material availability and costs, a talent gap, and global economic uncertainty — “we are feeling positive about the opportunities for the tool and die industry in 2022,” Harbour concluded.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish