Profits have plummeted for U.S. moldmakers
Canadian PlasticsCanadian Plastics
Figures released this week by D-M-E Company illustrate a dramatic decline in profitability and sales among U.S.-bas...
Figures released this week by D-M-E Company illustrate a dramatic decline in profitability and sales among U.S.-based moldmakers.
D-M-E released the results of an independent survey completed by approximately 1,000 companies in the U.S. industrial mold and die industries. Eighty-five percent of the survey respondents were manufacturers of “molds for plastics”. For the purpose of demonstrating the overall U.S. moldmaking industry impact, survey data was multiplied by a factor of five based on the 20% survey response rate.
The extrapolated total sales figure for the U.S. moldmaking industry as a whole in 2001 was US$8.4 billion. From 1997 to 2001, sales were down an average of 34.9% for 83% of the survey respondents while sales were up an average of 47% for 17% of the respondents. On a weighted average basis, overall sales in the U.S. mold making industry were down 28.1% from 1997 to 2001.
On an extrapolated basis, this 28.1% decline in sales equates to a US$3.3 billion decrease in sales for the U.S. moldmaking industry.
Profit before tax (PBT) as a percentage of sales has dropped from an average of 16.6% in 1997 to an average of 1.4% in 2001 for the survey respondents. This represents a PBT decline of over 90% since 1997.
The survey results were given to all industry associations for their use in advance of last week’s U.S. International Trade Commission hearing in Washington, D.C. The results were then presented by D-M-E Company president Jerry Lirette at the May 21st ITC hearing. The ITC investigation is examining competitive conditions in the U.S. moldmaking industry (See Canadian Plastics magazine, March 2002, Moldmaking Report for more on the ITC investigation).
Employment in the industry has also declined during the period from 1997 to 2001. Respondents to the D-M-E survey reported employment in 2001 was down by an average of 28.8%for 85% of respondents while employment was up by an average of 27.6% for 15% of respondents. On a weighted average, the overall employment level for moldmaking companies that are still in business is down 23.8% between 1997 and 2001. This equates to 46,000 employees for the companies that are still in business.
Combining a documented list of more than 200 U.S. moldmaking companies that have gone out of business since 1997 and the number of employees directly impacted by personnel cutbacks (the aforementioned 46,000), more than 52,000 moldmaking professionals have lost their jobs since 1997.
Respondents also reported a 19.3% decrease in the average number of hours worked per week per moldmaking industry employee between 1997 and 2000.
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