The North American automotive tooling sector had a soft start in the first quarter, but business should pick up in the second half of 2019, according to a report from Harbour Results Inc. and the Original Equipment Suppliers Association.
Consultant Laurie Harbour expects the North American auto industry will spend will be about $8 billion on tooling this year.
"However, there are a number of factors, including tariffs and automaker restructuring, that could significantly impact the industry and tooling spend," she said. "As a whole, the tooling industry is slow, but we are seeing some shops that remain busy — primarily because they have diversified their customer base."
The Q1 2019 Automotive Tooling Barometer conducted by Southfield, Mich.-based Harbour Results surveyed companies producing both plastics molds and stamping dies. Washington-based OESA represents automotive original equipment suppliers.
The report, issued April 10, said mold shops saw a slight increase, 2 percent, in utilization rates in the first quarter over the fourth quarter of 2018, growing to 79 percent from 77 percent. Utilization at die shops dropped drastically to 74 percent, from 85 percent in the fourth quarter.
Harbour said that drop could be an indicator that mold shop utilization could dip in the near future, because dies require a longer lead time than molds.
Work-on-hold continues its upward trend, with an average of 12.6 percent, driven by several automotive program delays, the report said. Based on those factors, tool shop owner sentiment dipped to 62 percent, the lowest point recorded since that measurement started in 2016.
The survey also looked at investment strategies.