The U.S. plastics industry is under pressure from rising material costs, supply chain kinks and a dearth of job applicants amid high unemployment.
Welcome to the post-pandemic recovery, where inflation woes are driven by economic stimulus and the threat of competition from low-cost countries looms large for businesses.
Mold builders, tooling suppliers and processors are all facing higher prices for steel, aluminum and resin as well as shipping delays, tariff fights and the need to offer higher wages and incentives to fill many vacant positions.
The issues were discussed during formal presentations and casual conservations at the 2021 conference of the American Mold Builders Association in Grand Rapids, Mich., from June 22-24.
"This probably affects some of your customers more than you, but there is definitely a fallout. It's not just about microchips, which is what everyone talks about," Laurie Harbour, president and CEO of Harbour Results Inc., told AMBA members.
About 150 people from the trade group's 200 member companies and 50 partner suppliers attended the conference, which was one of the U.S. plastic industry's first in-person events in 15 months.
Supply chain problems aren't going away, Harbour said. Companies should plan for steel pricing and availability problems through the end of the year resin fluctuations though the second quarter of 2022, and shortages of truck drivers and microchips to be long term.
Still, Harbour is bullish for tooling manufacturers because of all the new product rollouts put on the back burner last year during COVID-19 lockdowns and restrictions.
"Everyone is launching a new appliance, a new snowmobile, a new ATV, and all of them require different tooling," Harbour said. "We need tools in the marketplace and we have some incredibly competitive shops. We're getting better every day."
For example, Harbour said she has a client making an automotive tool who has cut six weeks from his lead time.
"He hasn't told his customer that. He stores them," she added. "He literally finishes the tools and puts them in the warehouse across the street and doesn't tell the customer until he's ready to pull them. He fights China all day log and he beats them on pricing. It's there, if we're willing to challenge ourselves to get more competitive."
Competition from low-cost countries topped the list of industry issues for AMBA members, followed by access to labor and raw material pricing.