As manufacturing has grown through the early part of 2004, injection molding
appears to be keeping pace, showing solid growth over the past six months.
Helped in part by all of U.S. manufacturing's significant new capital
spending and plant expansions, the production of injection-molded goods is
showing the first real increase in years.
One area where injection molding has seen major increases is in the housing
industry, which has seen record growth for the past four years and is expected
to continue for at least 12 more months and possibly beyond. According to
a Department of Commerce report, construction spending jumped in April to
a third consecutive record high as slowly rising mortgage interest rates
spurred a rush to build. Construction spending rose 1.3% to a seasonally
adjusted annual rate of $970.39 billion, up from a revised $957.63 billion
pace in March. Furthermore, public construction climbed 1.7% to $230.47 billion,
also a new high, from $226.58 billion, while private nonresidential construction
rose for the third straight month to $219.19 billion, the highest level since
March 2003.
Such large-scale construction projects result in sharp increases in orders
for many types of molded products, especially for large volumes of identical
molded parts to furnish buildings—everything from plumbing fixtures
to lighting products and appliances.
The surge in sales in the automotive industry has proven to be another positive
area of growth critical to U.S. molders. Companies such as AFT,
with extensive experience in creating Metal
Injection Molded parts for the auto industry, have seen an increase in
orders. According to a recent article in Injection
Molding Magazine, import and export data on automotive parts show a sharp
decline of car part imports. The weak dollar is having a significant impact
on such imports (excluding Nafta partners Mexico and Canada), while exports—even
to China—of automotive components from the U.S. are surging. The article
further reports that Asian firms are far less of a threat now than ever before.
Much of the assembly has been shifted into the North American territory and
Nafta-based suppliers are flourishing.
While the manufacturing boom is expected to continue through the end of
this year and into the early part of 2005, there are some worrisome issues.
Oil and energy prices are cutting into many molders' profitability,
and import pressures remain a big problem, particularly for molders of commodity,
lower-end molded parts. Furthermore, few molders have any real pricing power,
unable to pass along cost increases to boost margins.
Nevertheless, the Injection Molding Magazine article reads the economic
tea leaves and predicts that North America's molders are in for sustained
growth at rates of at least 3.1% for the next 12 months. The only real risk
they see is a major terror attack that could reverse current growth patterns.
Compiled from Injection Molding Magazine as well as various news and
wires services.
For more information about injection molding prices and growth, visit http://www.immnet.com/articles?article=2306.
|
