The automotive tooling sector continued its slowdown in the second quarter, according to a report from Harbour Results Inc. and the Original Equipment Suppliers Association.
The Q2 2019 Automotive Tooling Barometer Survey also showed that capacity for automotive toolmakers hit its lowest level since 2016, when the survey first started to collect that metric.
Mold shop capacity utilization fell 4 percent to 74 percent in the second quarter from the first quarter, which itself represented a soft start to 2019, the report said. Die shop utilization also fell the same amount, from 74 percent to 70 percent in the same time frame.
And the report said that automotive program delays drove work on hold to a record high of more than 20 percent.
Based on those factors, the sentiment of tool shop owners dropped to 61 percent.
"During the first two quarters of 2019, the industry saw a decrease in utilization and a significant increase in work on hold," said Laurie Harbour, president and CEO of Harbour Results in Southfield, Mich. "With this challenging environment, we can expect shops to continue to struggle as the year progresses. This, coupled with the fact that Chinese tool shops continue to significantly underprice North American shops, [signals] we will likely see more layoffs and bankruptcies in the balance of the year."
As 2018 drew to a close, President Donald Trump's administration removed 25 percent tariffs on injection molds imported from China, exempting them from the U.S.-China trade wars for at least one year. The unexpected move came as more than 200 requests from plastics injection molding companies — many of them in the automotive supply chain — filed requests with the U.S. Trade Representative to exempt their specific mold imports.
U.S. mold makers had strongly supported the tariffs.