An online survey of mold manufacturers conducted by the American Mold Builders Association (AMBA; Indianapolis) reaped generally positive views of the business outlook going into 2019. The medical, dental and optical sectors are deemed the most promising, while automotive is expected to lag.
Presidents, owners and senior staff from 136 companies took the survey, which ran from Dec. 27 through Jan. 31. Forty-four percent of respondents were from companies reporting $1 million to $4.9 million in sales and 39% came from companies in the $5 million to $14.9 million range. Manufacturers of plastic injection molds represented 77% of respondents; 16% were makers of rubber and compression molds.
The top three markets served by survey participants were automotive (65%), consumer products (58%), and medical, dental and optical (49%). Packaging came in fourth at 24%.
Employment was up for 12% of respondents compared with three months prior to the survey; 76% reported that employment remained the same; and 11% said that employment was down. In the 2018 business forecast, 29% reported that employment was up, with 67% saying it was unchanged, and only 4% reporting a decline.
Backlog was up for 40% of the respondents in the 2019 survey, compared with 32% in the 2018 survey.
AMBA Executive Director Troy Nix noted that the vast majority of mold makers with sales over $15 million saw an increase in backlog while those companies below $1 million in sales saw a decrease. “Those companies in the median sales area carried the bulk of the increased backlog,” he said.
Profits were the same for 60% of respondents compared with three months before the survey; they were up for 23% and down for 17% of respondents.
Overall, the current state of business as viewed in the survey period is mostly positive, Nix reported, with 50% of respondents reporting that business conditions are “good.” Smaller companies with under $1 million in sales, however, were the least likely to express optimism.
The hiring forecast looks promising, with 75% of respondents saying that they will be hiring; 15% said they were “not sure.” That might be due to the fact that over the next three months half of survey respondents said they expect business to “increase moderately,” with 10% saying they expect it to increase “substantially.” For about one-third of respondents, business is expected to remain the same.
A plurality (33%) of mold manufacturers expect to see the biggest business opportunities in the medical, dental and optical sectors, followed by automotive (16%), consumer goods (13%) and packaging (7%). “An aging population is creating growth opportunities,” commented Nix. “Even in a poor economy, medical, dental and optical will continue to grow.”
The automotive market has slipped out of the fast lane for 47% of respondents. “They seem to be more skeptical of automotive,” Nix said. “Automotive is projecting under 17 million units forecast for the first time in four years. If you’re servicing GM, you’re probably not optimistic, as autonomous and electric vehicles are starting to sliver out suppliers.”
Capital expenditures are expected to decrease among 60% of respondents with less than $1 million in sales. At companies in the $1 million to $4.9 million category, 48% expect to increase capital expenditures. “A lot of companies took advantage of the 2018 tax changes,” commented Nix.
The top challenge for moldmaking companies continues to be workforce development, with 100% of respondents noting that in the survey.
With respect to overseas tooling procurement, 66% said they do some buying of molds offshore. “I’d love to see the 29% grow to 100% one day,” Nix said. The number of respondents purchasing some molds overseas is down from 72% in 2017, however. “I have to think tariffs have something to do with the drop-off,” said Nix.
From the viewpoint of plastics processing customers, 42% said they are reshoring work back to the United States; 36% said they are not actively looking; and 19% reported customers were moderately looking. That’s optimistic, with Nix noting that the numbers were reversed not too many years ago. (The numbers are from the Manufacturers Association of Plastics Processors; Nix is also Executive Director of that trade group.)
“People are trying to bring stuff back, but processors are taking their foot off the accelerator,” Nix commented. “There was a lot of activity in 2018 with capital expenditures from processors, with 43% investing in automation and 31% investing in primary equipment. They’re doing everything they can to drive labor out of the process.”