What Do They REALLY Think?
Manufacturing is hot again after the chill of the Great Recession, and our latest Injection Molders' Benchmark Survey gives us a look at an industry segment that we hope is heating up along with it. Markets served, buying intentions, utilization rates - it's all here. Let's see how some of Canada's injection molders fared over the past 12 months, and what they believe is coming their way in 2013.
February 1, 2013 by Mark Stephen, editor
For the past few years, the Canadian Plastics injection molders’ surveys have read more like Stephen King horror stories than anything else, charting an industry in freefall and reflecting everything from declining utilization rates to freezes on equipment purchases. Now, as Canada comes out of the worst economic downturn since the Depression, it’s the manufacturing sector that leads the way. Are injection molders sharing in the recovery? Let’s let the molders speak for themselves.
Right off the bat, we have a bit of good news: approximately 66% of respondents this year said they worked in an I/M shop with 50 or more employees, compared to 60% reporting the same last year and a meagre 25% in 2010. This seems to show a continuing recovery from the employee downsizing that many companies underwent during the recession.
Fifty-eight per cent of respondents to this year’s survey worked in shops that had either an ISO or QS9000 standard. With another 8% of respondents saying their shops are in the process of becoming certified, this shows no real change from the 62% that had one or the other standard last year.
As always, the majority of respondents — 52.4% — work in Ontario, but we also heard from Quebec (33.3%), British Columbia (9.5%), and Alberta (4.8%).
To the surprise of no one, our surveys over the past few years have recorded a steady decline in the number of shops that specialize in molding auto parts. In 2009, the majority of our respondents, for the first time, reported consumer goods as their main market served; two years later, that number had grown to over 65% of respondents. Well, the trend continues this year, with 73.1% of respondents molding primarily consumer goods. Almost 43% of respondents primarily serve the electronics markets, 34.6% serve the auto market, 34.6% specialize in medical parts, 30.8% specialize in parts for construction, and 23.1% specialize in packaging applications.
The number of exclusive captive molders, meanwhile, holds steady: almost 12% of respondents this year said their shops were exclusive captive molders, compared to 10% of respondents last year, and well up from 2.9% in 2010. The largest number (40.7%) this year identified themselves as custom molders doing some proprietary work on the side, followed by exclusively custom molding (37%), captive molding with some custom molding (7.4%), and exclusively proprietary molding (3.7%).
ARE THEY BUYING IT?
Whatever they’re making, business for most our respondents is picking up. Almost 43% said business volume improved in 2012 by more than 10% compared to 2011, 14.3% said it was up by between 6% to 10%, and 14.3% reported no change. That’s good news any way you slice it, since it reinforces similar improvements reported by respondents in the two years since a whopping 77% respondents reported a significant business downturn in the dark days of 2009. Furthermore, 52.4% of respondents this year anticipate a business volume increase of more than 10% during 2013, and 47.6% expect business to either remain the same or improve by up to 10%. Doing the math thusly, we see that on one — not a single respondent — expects their business to fall off in the next 12 months.
On the down side — literally — utilization rates have stopped ticking upwards. In 2010, a relatively healthy 15% of respondents reported utilizing more than 80% of their machines; last year, 14.7% hit the same mark. This year, only 9.5% of respondents reported a utilization rate of more than 80%. Another 42.8% from this year’s group had a utilization rate of between 60% and 79%, which is roughly on par with the rates reported 12 months ago.
But here’s the gazillion-dollar question for the machinery suppliers: will this slight decline hurt the processors’ appetites for new equipment? It doesn’t sound like it. Almost 43% told us their shops planned to buy injection molding machines in 2013, and 56.3% of these said they’d be on the lookout for new I/M machines; the remaining 43.8% are either entirely or partly on the lookout for pre-owned units. Additionally, 19% of this year’s respondents said they were unsure about adding any kind of molding machines during the next 12 months, but didn’t rule it out.
On the auxiliary equipment front, it gets slightly better still. Approximately 57% of respondents this year plan on buying auxiliary equipment during 2013; of these, 33.3% are looking to buy linear robots and 14.3% are on the hunt for six-axis robots.
As interesting as they are, statistics about machine utilization only tell part of the injection molding industry story. Take wages, for instance. According to last year’s survey results, the average hourly wage paid to a machine operator was $14.75, excluding benefits — a big drop from previous years that almost certainly reflected the lagging impact of the Great Recession. So how did wages in 2012 compare? Marginally better from the workers’ perspective. Averaged out, the decline has been reversed slightly, with the hourly machine operator wage ticking up to $15.06. In some ways, it seems, the cutbacks might be over.
The Injection Molders’ Benchmark Survey was sent to 660 people at injection molding shops throughout Canada, with one survey going to one respondent per facility. We received 28 completed surveys. Because not everyone answered each question, the percentage values in the charts and tables might be given as a percentage of the respondents to that question, with the number of respondents given in parenthesis, for example (n=23). We thank the participants.
VIEW SURVEY RESULTS ONLINE
If you’re curious, the complete 2012 Injection Molders’ Benchmark Survey results are available at: