Hourly rates dipped again at midyear. (Hourly Rate Survey).

Custom injection molders' machine-hour rates dipped 1.3% on average in the second quarter of the year, according to 122 plants responding to our latest semi-annual survey. Rates have been dropping since the end of 2000. About 12% of respondents said their rates were lower in the second quarter than in the quarter before. Only 5% raised rates, and 83% did not change them at all.

However, there were some signs that business was turning the corner at midyear. Molders' average machine capacity utilization rose about 1.5 percentage points to 53%--still very low by historical standards. Almost 40% of respondents said their capacity utilization increased in the second quarter, versus 31% whose utilization was lower and 29% whose utilization was unchanged. This was the first time since early 2000 that more shops were gaining business than were losing it. Southeastern: molders again enjoyed the highest capacity utilization, while those in the West had the most idle capacity.

Optimism prevails

Molders' optimism about business conditions has increased steadily since the middle of 2001 and rose again at midyear 2002. More than 54% of respondents expected business conditions to improve in the near term, while 14% expected worsening business and 32% foresaw no change. South Central molders again were the most optimistic, while North Central processors were the least upbeat.

Despite molders' favorable outlook and increasing capacity utilization, there was a cautionary sign in declining orders for new molds. According to reports from 82 moldmaking shops nationwide, tooling orders dropped an average of 6.4% in the second quarter. Shops reporting fewer mold orders outnumbered those with increasing orders by 34% to 28%. This was the third survey in a row that saw declining mold orders, but the decline has grown steadily less steep.

CUSTOM INJECTION CAPACITY UTILIZATION


4th Qtr 1999  64
1st Qtr 2000  66
4th Qtr 2000  60
2nd Qtr 2001  58
4th Qtr 2001  52
2nd Qtr 2002  53

Note: Table made from bar graph
PROFIT & LABOR IN HOURLY RATES

Deduct these amounts (a) 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           11.9%           16.7%             30.2%
100-299         8.1%           12.1%             24.4%
300-499         7.1%           10.3%             20.5%
500-749         5.6%            8.5%             17.4%
750-999         6.8%           12.4%             21.5%
1000+           4.1%           11.6%             16.7%

(a)Cumulative national averages over many surveys.
CUSTOM INJECTION MOLDERS' MACHINE- HOUR RATES WITH OPERATOR, PROFIT
MARGIN INCLUDED (a) (122 PLANTS)

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Dollars Per Hour (High/Average/Low) 2nd Quarter 2002

Tonnage Range                      <50   50-99  100-299  300-499

Northeast                       $75.00  $86.33   $89.78   $75.00
(ME, NH, VT, MA, CT,            $37.83  $39.72   $44.24   $45.57
RI, NY, NJ, PA)                 $14.70  $20.00   $20.00   $20.00

Southeast                       $40.00  $50.00   $51.80   $69.06
(DE, DC, FL, GA, MD,            $32.26  $34.47   $39.33   $48.09
NC, SC, VA, WV)                 $20.00  $20.72   $26.95   $34.82

North Central                   $50.00  $61.46  $164.85  $200.40
(IL, IN, MI, OH, WI, IA,        $29.43  $32.30   $43.70   $61.41
KS, MN, MO, NE, ND, SD)         $12.02  $12.36   $17.37   $24.05

South Central                   $32.23  $49.46   $54.95   $76.93
(AL, KY, MS, TN, AR,            $32.23  $29.99   $31.98   $38.43
LA, OK, TX)                     $32.23  $12.49   $22.44   $24.17

West (CA, OR, WA,               $67.00  $80.16   $80.16   $72.00
AK, HI, AZ, CO, ID, MT,         $36.35  $38.57   $42.00   $52.00
NV, NM, UT, WY)                 $10.97  $15.75    $3.90   $27.90

National Average (c)            $33.31  $35.24   $41.92   $52.13
Average Change in Hourly Rates
In Second quarter 2002: -1.3%

Tonnage Range                   500-749  750-999  1000-1499  1500-1999

Northeast                        $76.93   $87.92
(ME, NH, VT, MA, CT,             $53.92   $83.45
RI, NY, NJ, PA)                  $33.40   $76.93

Southeast                       $111.23             $222.46
(DE, DC, FL, GA, MD,             $74.36             $216.42
NC, SC, VA, WV)                  $57.26             $209.78

North Central                   $260.52  $130.00    $105.00    $132.37
(IL, IN, MI, OH, WI, IA,         $83.75   $82.31     $90.67    $117.69
KS, MN, MO, NE, ND, SD)          $40.00   $45.00     $82.43    $104.41

South Central                    $53.44   $61.54    $143.88     $96.19
(AL, KY, MS, TN, AR,             $41.27   $59.29     $97.00     $94.26
LA, OK, TX)                      $32.23   $57.55     $73.48     $92.32

West (CA, OR, WA,                $86.33  $120.00    $110.00    $140.00
AK, HI, AZ, CO, ID, MT,          $67.23   $98.95     $98.33    $140.00
NV, NM, UT, WY)                  $40.00   $80.00     $90.00    $140.00

National Average (c)             $68.14   $83.22    $110.28    $119.95
Average Change in Hourly Rates
In Second quarter 2002: -1.3%

Tonnage Range                   2000-2999    3000+  Index (b)

Northeast
(ME, NH, VT, MA, CT,                                  100
RI, NY, NJ, PA)

Southeast                         $348.45
(DE, DC, FL, GA, MD,              $338.52              93
NC, SC, VA, WV)                   $328.59

North Central                     $175.00
(IL, IN, MI, OH, WI, IA,          $135.46              99
KS, MN, MO, NE, ND, SD)           $104.41

South Central
(AL, KY, MS, TN, AR,                                   77
LA, OK, TX)

West (CA, OR, WA,                 $190.00  $230.00
AK, HI, AZ, CO, ID, MT,           $190.00  $230.00    100
NV, NM, UT, WY)                   $190.00  $230.00

National Average (c)              $181.68  $230.00
Average Change in Hourly Rates
In Second quarter 2002: -1.3%

(a)An adjustment factor is used where data did not already include
profit and labor.

(b)Relative to highest-cost region (which equals 100); valve shown is a
weighted average for all size ranges.

(c)Weighted geographically according to PLASTICS TECHNOLOGY's
Manufacturing Census.