Hourly rates flip-flop in 1st quarter.After sagging sag v. sagged, sag·ging, sags v.intr. 1. To sink, droop, or settle from pressure or weight. 2. for two successive quarters in 1991, custom injection molders' machine-hour rates briefly perked up Adj. 1. perked up - made or become more cheerful or lively; "his attention made her feel all perked up" enlivened - made sprightly or cheerful in the fourth quarter and dropped back down again in the first quarter of 1992. But the stage appeared to be set for them to rise again by mid-year. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. returns from 195 custom molders around the country (an unusually large response to our latest quarterly survey), hourly rates slumped 7-8% in the first quarter, after rising 11-12% in the fourth quarter of '91. That leaves average rates 2-3% below their levels in the first quarter of '91. A PARADOX EXPLAINED? The apparent paradox of a fourth-quarter rise in hourly rates when business was terrible, which we reported in April (p. 113), now may have an explanation. In January (p. 83), we first noted the observable ob·serv·a·ble adj. 1. Possible to observe: observable phenomena; an observable change in demeanor. See Synonyms at noticeable. 2. TABULAR tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. DATA OMITTED correlation between the historical rise and fall of both hourly rates and injection machine capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. , derived from PLASTICS TECHNOLOGY's quarterly surveys since 1988. Until recently, it appeared that hourly rates tended to follow changes in capacity utilization by about six months. More recently, that lag shrank shrank v. A past tense of shrink. shrank Verb a past tense of shrink shrank shrink to three months. It looks as if custom processors, impatient with the lingering recession, leaped at the brief upturn in business in the third quarter as a sign of the long-awaited turnaround and raised their prices in the quarter immediately following. That turned out to be premature as capacity utilization plummeted in the fourth quarter, and molders promptly cut back their hourly rates again in the first quarter of '92. But capacity utilization revived again in the first quarter, so hourly rates may have followed in the second quarter. It's interesting to note that hourly rates dropped in the first quarter only for machines of less than 750 tons. Rates for larger presses actually increased substantially. The first-quarter overall decline in rates was also not uniform across the country. The Southeast was the one region to show an increase in average machine-hour rates for the quarter. |
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