The North American automotive tooling sector has experienced a slower-than-predicted first half of 2018, with a significant amount of business pushed out to the second half, according to the second-quarter tooling barometer issued by the Original Equipment Suppliers Association and Harbour Results Inc.
Consultant Laurie Harbour said the North American automotive tooling spend hit a record in 2017, at a little more than $10 billion.
"Now automakers are focused on launching the vehicles they built tools for in 2016 and 2017," she said.
The original forecast predicted the 2018 North American vendor tooling spend to be $11 billion. "However, due to a number factors, including shifted or canceled product launches, we are now expecting it to be closer to $8.5 or $9 billion, with the remaining $2 billion shifting to 2019," Harbour said.
Laurie Harbour is president and CEO of Harbour Results in Southfield, Mich.
From the first quarter to the second quarter of 2018, both die and mold shops saw a decrease in capacity utilization, she said. And work-on-hold continued to climb, with an average of 13.5 percent in the second quarter, up from 11 percent in the first quarter, the result of several automotive program delays, the report said.
The study also showed that the sector is reducing its overall capital investment spending. On average, mold builders plan to contribute 4.8 percent of sales for new capital expenditures, down from 7.7 percent in 2017. The average die builder expects to invest 4.6 percent of sales, compared to 5.9 percent in 2017.
Also, the percentage of investments earmarked for machine expenditures is expected to decrease this year, the study said.
"Tool shops are shifting capital from big ticket equipment to productivity improvements, particularly in the areas of automation and high-speed cutting equipment," Harbour said. "Additionally, we are seeing shops looking to invest in software with 68 percent of mold builders and 42 percent of die shops indicating they have plans to invest in machine monitoring solutions."
Tooling makers are trying to bridge the skills gap. According to the Tooling Barometer, companies are using many options, including school partnerships (68 percent), apprenticeships (58 percent) and job placement websites (57.5 percent). For mold makers, 14 percent of their total hourly employees are apprentices while die shops average 10 percent. Those numbers have remained consistent over the past several years, the study said.
The Tooling Barometer's survey population was comprised of mold shops (74 percent) and die shops (26 percent) located the United States (57 percent), Canada (28 percent), Europe (9 percent) and Asia (5 percent).
Shops surveyed have revenue sales ranging from less than $5 million to greater than $40 million. The largest sales segment came from tool makers of $5-$10 million.
Julie Fream, president and CEO of the Washington-based Original Equipment Suppliers Association, said the survey results reflect what OESA has heard from toolmakers on its Tooling Council.
"Toolmakers expect a busy second half of the year as programs catch up with earlier forecasts," Fream said.