Hourly Rates Rose in Second Half

Custom injection molders raised their machine-hour rates an average of 1% from June to December 2007, according to responses from 93 molders to our latest semi-annual survey. Molders’ capacity utilization rose, too, despite signs pointing to economic slowdown and growing pessimism.

The uptick in hourly rates was the sixth in a row since the end of 2004. The small average increase masks the fact that 76% of respondents did not change their rates at all. But 22% did raise their rates (by an average of 6%) and 2% lowered them.

Custom molding capacity utilization also rose 1% in the second half. Utilization was highest in North Central states and lowest in the Southeast. Only 16% of molders reported higher capacity utilization in the second half, vs. 46% in the first half. It was the lowest percentage since 2000. Nearly 50% of molders saw lower utilization, vs. 31% in the first half. It was the largest proportion of declines since 2001 and the first time since 2005 that declines outnumbered increases.

Also down was molders’ optimism about business conditions. Only 31% expected improvement in the near term, vs. 41% six months earlier and 52% a year earlier. This was the lowest level of optimism in 11 years. Those who expected worsening conditions rose to 36%. It was the first time pessimists outnumbered optimists since 2000.

Meanwhile, 63 moldmaking shops reported a 10% drop in orders in late 2007. It was the third decline in a row and the sharpest six-month plunge since mid-2001. 

 

PROFIT & LABOR IN HOURLY RATES
Deduct these amountsa from the figures in the larger table to arrive at rates without profit, operator, or both.
Press  Tonnage	Without Profit	Without Operator	Without Either
<100	12.6%	17.6%	31.8%
100-299	8.7%	13.3%	26.6%
300-499	7.2%	11.1%	22.0%
500-749	5.7%	9.4%	18.7%
750-999	6.5%	13.3%	21.1%
1000+	4.9%	13.6%	16.7%
a Cumulative national averages over many surveys.

CUSTOM INJECTION MOLDERS' MACHINE-HOUR RATES  WITH OPERATOR, PROFIT MARGIN INCLUDEDa (88 PLANTS)
Dollars Per Hour (High/Average/Low) 4th Quarter 2007
Tonnage Range	<50	50-99	100-299	300-499	500-749	750-999	1000-1499	1500-1999	2000-2999	3000+	Indexb
Northeat (ME, NH, VT, MA, CT, RI, NY, NJ, PA)	$69.90	$81.55	$87.38	$90.03	$92.00	$115.00
	$40.09	$47.82	$47.82	$59.07	$59.84	$100.06					97
	$29.13	$30.00	$30.00	$35.00	$52.43	$82.80
Southeast (DE, DC, FL, GA, MD, NC, SC, VA, WV)	$58.25	$60.00	$75.00	$85.00	$90.22	$75.00	$153.10	$110.40
	$37.31	$36.29	$36.29	$47.85	$54.95	$52.56	$114.05	$110.40			79
	$20.51	$4.42	$4.42	$25.97	$28.71	$31.44	$75.00	$110.40
North Central (IL, IN, MI, OH, WI, IA, KS, MN, MO, NE, ND, SD)	$52.43	$61.52	$61.52	$75.73	$102.53	$109.36	$161.31	$266.57	$130.00	$175.00
	$32.75	$39.28	$39.28	$52.37	$62.36	$90.61	$132.98	$204.79	$130.00	$175.00	84
	$17.48	$20.51	$20.51	$20.51	$18.45	$69.90	$107.00	$127.00	$130.00	$175.00
South Central (AL, KY, MS, TN, AR, LA, OK, TX)	$50.00	$99.36	$99.36	$132.48	$122.33	$151.45	$94.34	$93.84
	$36.74	$46.54	$46.54	$56.39	$71.52	$75.42	$77.12	$93.84			92
	$19.82	$29.13	$29.13	$41.01	$49.21	$11.07	$63.00	$93.84
West (CA, OR, WA, AK, HI, AZ, CO, ID, MT, NV, NM, UT, WY)	$75.00	$75.73	$75.73	$125.00	$136.70	$113.84	$141.44
	$37.96	$47.34	$47.34	$64.12	$70.74	$91.78	$139.07				100
	$11.76	$18.64	$18.64	$35.00	$64.08	$75.00	$136.70
National Averagec	$36.36	$43.25	$43.25	$56.03	$66.34	$87.82	$124.27	$168.76	$130.00	$175.00
Average Change in Hourly Rates In Second Half 2007: +1.0%
a An adjustment factor is used where data do not already include profit and labor. b Relative to highest-cost region (which equals 100); value shown is a weighted average for all size ranges. c Weighted geographically according to Plastics Technology's Manufacturing Census.