Survey: Tooling Industry Experienced Strong Third Quarter – Capacity Utilization High

Survey: Tooling Industry Experienced Strong Third Quarter – Capacity Utilization High

SOUTHFIELD – A new survey shows that the tooling industry experienced a strong third quarter, with die shops in particular experiencing an 88 percent spike in capacity utilization and mod shops reaching 81 percent capacity. Shops with revenue ranges of $10-million to $20-million are experiencing peak capacity utilization rates of 87 percent.

The results come from a survey done by the Original Equipment Suppliers Association (OESA) and Harbour Results, Inc., (HRI) recently released the results of their Q3 2017 Automotive Tooling Barometer.

“Even though mold shops are slightly less utilized than die shops, average profitability numbers across the industry are still very close,” said Laurie Harbour, president and CEO of HRI. “That being said, the top performing tool shops average eight points more profit compared to the averages.”

The cyclical nature of work-on-hold continues, as it falls to 8.6 percent, the lowest it has been since this study started in 2014. Despite record low work-on-hold numbers, overall sentiment (a tool shop’s general outlook for the next three months) dropped two percentage points, but still remains in the overwhelmingly positive range.

The slight decrease in sentiment is likely due to the continued hurdles the tooling industry is facing. Overall, skilled labor (38 percent) stands out as the foremost issue in the industry, followed by on-time delivery (18 percent) and profitability (14 percent). These key issues vary considerably depending on factors such as a shop’s profitability, type and geography.

“The shortage of skilled labor is a major concern for both U.S. and Canadian shops in multiple processes – mold, die and plastic molding,” said Julie A. Fream, president and CEO, OESA. “In order to combat this issue, it’s necessary that these companies implement a talent acquisition program to educate, attract and hire young people with the aptitude to work in the tool and die industry.”

The survey population was comprised of mold shops (77 percent) and die shops (23 percent), both in the U.S. (70 percent) and Canada (30 percent). Shops with revenue ranges less than $5M up to greater than $40M were represented, with the largest percentage of shops coming from the $10-$20M (30 percent) range.

By |2017-10-22T16:58:26+00:00October 22nd, 2017|Auto Tech, Autonomous Vehicles|

About the Author:

Founder of Michigan News Network, and serves as CEO, as well as Editor & Publisher of MITECHNEWS.COM. Brennan has worked since 1980 as a technology writer at newspapers in New York, NY, San Jose, CA., Seattle, WA., Memphis, TN., Detroit, MI., and London, England. He co-founded and served as managing editor of Pacific Rim News Service (SEATTLE), which developed a network of more than 100 freelance journalists in 17 Asia-Pacific countries.

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