The Spring 2010 Business Forecast of the American Mold Builders
Association reveals a hint of recovery as business upticks lend an
air of hopefulness. The quarterly survey revealed that current
business conditions once again improved slightly over the previous
three months, with 7% of the respondents saying that business is
“Excellent” – up a full percentage point from 6% of respondents
in the Winter 2010 survey, and putting that category back to where
it was in the Fall 2009 survey. A total of 44% of the membership
responded to this recent survey.
Current business conditions also improved, moving up 2% for those
reporting “Good” conditions (35%) compared to 33% of the
respondents in the Winter survey. That is up a full 12% from the
Fall survey, as the outlook continues to move in the right
direction. “Fair” business conditions exist for 43% of the
respondents compared to 44% of the respondents in the Fall survey.
Those reporting “Poor”
business conditions
continues to fall, with only 14% noting poor conditions, down one
percentage point from the Winter 2010 survey, and a big drop from
the 27% reporting poor business conditions in the Fall
survey. “Bad” conditions exist for only 1% of respondents,
yet another percentage point improvement from the 2% reporting “bad”
conditions in the Winter survey, and a nice decline from 5% of the
respondents in the Fall survey, and a continued improvement from the
12% reporting “Bad” conditions in the Summer survey.
Projections for business over the next three months are
a bit more pessimistic with respect to the outlook of future
business among respondents. Only 4% expect business to Increase
Substantially, compared
to 8% in the Winter survey.
Those expecting business to
Increase Moderately
ticked upward to 44%, compared to 40% of the respondents in the
Winter 2010 survey, once again showing more optimism.
Forty-five percent of respondents expect business to Remain the
Same. Respondents expecting business to Decrease Moderately
again dropped by
two percentage points to 7% compared to 9% in the Winter 2010
survey. None of the respondents expect business to Decrease
Substantially, down
2% and marking the first time that has happened in recent
history.
When asked to compare their company’s current level of business with
that of three months ago, responses indicate some movement in a
positive direction:
Quoting
activity is again Up --
46% of the respondents compared to 40% of the respondents in the
previous survey; the Same
for 35%, down from 59% in the Winter 2010 survey; and
Down for just 19%, a
drop of 2% from the 21%
in the Winter survey. Several respondents noted that there is an
increasing lag time between quoting and getting the P.O. “We are
having a very difficult time getting customers to release purchase
orders,” said one respondent. “They are holding them until the very
last minute in most cases.”
Shipments
are Up for 36% of the respondents, compared to 33% last quarter, a
continued upward trend from 29% in the Fall 2009 survey. Shipments
stayed about the Same for 42% of respondents; and Down for 22% of
the respondents. Backlog is Up for 34% of the respondents, a
slight downturn from the 38% in the Winter survey; the Same for 36%
(up 3 percentage points from the Winter survey) and Down for 30%
(two percentage point drop from 32% in the Winter survey). This
seems to indicate that work is staying steady and not fluctuating
too much in the wrong direction.
Profits
in the Spring survey ticked upward once again, with 20% reporting
that profits are Up, compared to 17% in the Winter survey. This
category has also trended up from a low in the Spring of 2009.
Profits are the Same for 49% of the respondents, identical to the
Winter survey, compared with 47% in the Fall survey. However,
profits are trending down for 31% of the respondents in the Spring
survey, compared to 34% in the Winter survey, a slight improvement.
Employment
levels have dropped off slightly, being Up for only 14% of the
respondents, compared to 16% in the Winter survey. They remained the
Same for 66% of the respondents, down from 74% in the Winter survey.
Employment is Down for only 20% of the respondents, double the 10%
of the respondents in the Winter survey.
The current average number of shop employees held steady at an
average of 22. The current average number of design and engineering
employees dropped by one in the Spring survey, to five. Work-week
hours for shop employees also remained steady at 45 for the Spring
survey, the same as the Winter survey. For design and engineering
employees the hours also remained at 45, the same as the Winter 2010
survey.
The Spring 2010 survey contained two questions. The first had to do
with health benefits provided by AMBA member shops: If your company
offers health benefits, what kind do you offer?
Of the respondents who chose to answer the question, 49
provide PPOs; 26 provide HMOs; 39 provide HSAs (Health Savings
Accounts); 2 provide FSAs (flexible spending accounts); 3 provide
traditional insurance; 2 provide no insurance; 3 provide an HRA; 1
self-funded; 1 EPO, and 1 PHP. 18 provide two or more types of
insurance.
The second question asked about marketing strategies. Of those
responding, 56% are redesigning their websites; 23% are advertising
in trade publications; 15% are advertising in online
e-newsletters/trade publications; 15% are creating an in-house
e-Newsletter for customers and potential customers; 41% attend
market specific trade shows. 21% are doing none of these things, but
are doing networking, have a Thomas Net account, and several are
making more efforts with personal sales calls, adding to direct
sales, and making other efforts to promote business with both
current and new customers.
A number of comments this quarter still show great concern about the
government, taxes and regulations, as well as continued concern
about the trade imbalance with China. “We need to fix the tax
imbalance with China,” commented one respondent.