With one stunning exception, most segments of the plastics industry should have few complaints about growth during the past decade.
A recently produced economic report from the Society of the Plastics Industry Inc., and available at plasticsnews.com, should put many U.S.-based processors at ease.
Sure, you still can complain about rising resin prices or thinning margins. But most are better off today than you were 10 years ago.
Output per employee: up 3.1 percent since 1989. Shipments: up 5.7 percent. Number of employees: up 2.7 percent.
Similar good news can be shared for both resin and equipment suppliers. But while those companies can reflect positively on where we´ve come as an industry, another group might rather be living in the ´80s.
That group is U.S.-based toolmakers. The SPI-generated figures bear out some of the concerns they have voiced of late, ever since their customers started looking outside the United States for low-cost molds.
For injection molds — the largest portion of plastics toolmaking — employee numbers have dropped 1.4 percent since 1989. Output per employee has grown a paltry 0.3 percent. And shipments are up a slim 1.4 percent.
Toolmakers should not take too much heart in one figure that has climbed considerably: the amount of new capital expenditures. With many mold shops getting faster, more efficient and more automated, investment in equipment has grown an astronomical 13.7 percent over 10 years.
That´s actually a good sign, said Lori Anderson, director of international and trade issues for Washington-based SPI. Mold makers are putting their money into needed improvements, said Anderson, who spoke Oct. 17 at the Plastics News Executive Forum in San Antonio.
Yet, all the dollars spent haven´t translated into much new business for toolmakers. It´s like the boy who buys a new bike, only to find his friends would rather ride with the new kids down the street.
What can be done? They were told to become more efficient, and the business would come. Now, they are being told to find global partners, and the business will come. Or to get larger in size, and the business will come.
All that is probably true. Backyard parlor games no longer work for many toolmakers. That´s why several tooling consultants are telling clients to buy, ally with others or sell out. That´s one of the messages from Jeffrey Mengel at consulting firm Plante & Moran LLP in Southfield, Mich.
"I´m promoting it as a solution to the problems faced," Mengel said. "People are now willing to listen to it."
We´ll have to see. The tooling industry could be ripe for major consolidation, something that has already occurred for processors.
You can blame that on the numbers.
Pryweller is a Plastics News senior reporter based in Akron, Ohio.