This week we publish our ranking of North American mold makers. The top 100 are in print but all 140 firms are online.
Those 140 companies reported total 2019 fiscal year sales of $2.9 billion, a 0.1 percent drop vs. 2018.
And after examining all those surveys, one trend was clear: The firms whose primary focus is building injection molds for the automotive market saw an average sales decline. That's a trend that may continue in 2020 thanks to the coronavirus-related auto industry shutdown earlier this year.
Before the pandemic, toolbuilding was generally a glimpse into the near-term future for plastics processing. Molds are created before production begins, of course, so we can make a good guess about what's coming up for processors based on what tools have been ordered.
I looked at our data for average sales per company for mold makers the past few years and compared it to the average sales for injection molders, which is the largest processing sector. In that stretch, I noticed that mold makers' sales have been growing about twice as fast as injection molders.
If that logic holds, then next year's injection molders ranking may be in for a downturn, based on the average sales per tooling company, year-over-year, being flat. (Average sales per company in this year's ranking is $20.75 million, compared to $20.93 million last year).
But what about the pandemic? Mold production turnaround requirements have accelerated and a lot of personal protective equipment production is being donated, so perhaps capacity increases won't correlate to increased sales figures by the same traditional margins in 2020.
And what about raw material costs? For 2019, the benchmark cost of aluminum was down 13 percent, to $1,804 per metric ton, and steel prices were down 27 percent to $604 per tonne, with both expected to continue the trend downward. This could help margins for toolmakers going forward.
Industry consultant Laurie Harbour has been cautioning toolmakers to prepare for a downturn since before the pandemic. In her new forecast, she says 30 percent of all North American manufacturers are at risk of closing in the next 18 months, with 10-15 percent of those being mold and die shops.
That is a sobering message. So we will close with some good news: For the companies in our ranking that did report a gain, the average increase was 15 percent. And 37 percent of our companies did report a gain — some even in the 40-50 percent range.
So if your business held flat or saw single-digit growth, congratulations. You were right on track with your industry. But many firms did manage to outperform the average.
Keller is Plastics News' editorial research coordinator and author of the All Things Data blog on PlasticsNews.com. Follow her on Twitter @holleekeller.