Molding business strong in first half of 2006.

* Though economic growth may be slowing now, custom injection molders presented a more bullish picture back in June. Sixty-five plants responding to our latest survey (only half the usual number) said their average machine capacity utilization was up 2.6 percentage points to 58.6%. That was the third increase in a row and yielded the highest average utilization since the end of 2000.

Some 38.5% of respondents said their utilization rose in the first half of the year, while 32% said their utilization had dropped and 29% saw no change. Capacity utilization was highest in the South Central region and lowest in the West. (Note: Due to extraordinarily low response from Western molders to this survey--fewer than 10 in any press-size category--data for this region maybe less representative than usual.)

Busier plant activity may have contributed to a 2% average increase in machine-hour rates during the first half of the year. That was the third increase in a row for our semi-annual surveys and the largest single increase in seven years.

Despite the change in average hourly rates, the large majority (67%) of respondents did not change their rates in the first half. Thirty percent raised their rates (by an average of 9%), which is the largest proportion of respondents in seven years. Only 4% lowered their rates.

Another bullish sign, reported by 43 mold shops, was a 10% increase in new tooling orders for the period--the fourth such increase in a row and an unusually large jump in activity.

Optimism still strong

Almost 48% of respondents saw business conditions improving in the near term, while 23% saw worse conditions ahead and 2% predicted no change. The percentage of optimists was down slightly, but so was that of the pessimists, and the ratio of optimists to pessimists was still more than two to one.

The most optimistic region was again the West, and the least optimistic was again the North Central (Great Lakes) industrial heartland.

CUSTOM INJECTION
CAPACITY UTILIZATION

4th Qtr
2003       55
2nd Qtr
2004       55
4th Qtr
2004       51
2nd Qtr
2005       54
4th Qtr
2005       56
2nd Qtr
2006       59

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            12.2%            17.6%              31.1%
100-299          8.7%            13.2%              26.0%
300-499          7.1%            11.0%              21.5%
500-749          5.5%             9.1%              18.2%
750-999          6.1%            13.0%              20.4%
1000+            5.6%            10.9%              17.7%

(a) Cumulative national averages over many surveys.

CUSTOM INJECTION MOLDERS' MACHINE-HOUR RATES
WITH OPERATOR, PROFIT MARGIN INCLUOED (a) (65 PLANTS)

                                   Dollars Per Hour (High/Average/Low)
                                             2nd Quarter 2006

Tonnage Range                          <50        50-99      100-299

Northeast                           $55.10       $59.51       $75.00
(ME, NH, VT, MA, CT,                $31.23       $33.23       $45.69
RI, NY, NJ, PA)                     $20.34       $24.50       $26.50
Southeast                           $60.00       $52.34       $52.35
(DE, DC, FL, GA, MD,                $28.66       $35.48       $44.63
NC, SC, VA, WV)                      $5.82       $23.26       $39.67
North Central                       $64.61       $64.61       $90.36
(IL, IN, MI, OH, WI, IA,            $29.28       $33.97       $44.86
KS, MN, MO, NE, ND, SD)             $17.45       $16.53       $19.84
South Central                       $45.73       $48.49       $51.24
(AL, KY, MS, TN, AR,                $26.73       $30.27       $33.75
LA, OK, TX)                         $10.85       $13.56       $21.70
West (CA, OR, WA,                   $49.00       $55.00       $95.00
AK, HI, AZ, CO, ID, MT,             $40.78       $50.52       $63.36
NV, NM, UT, WY)                     $32.56       $46.52       $52.34
National Average (c)                $31.43       $36.40       $47.12
Average Change in Hourly Rates
In First Half 2006:                  +2.0%

                                   Dollars Per Hour (High/Average/Low)
                                             2nd Quarter 2006

Tonnage Range                      300-499      500-749      750-999

Northeast                           $80.00       $70.53
(ME, NH, VT, MA, CT,                $56.54       $63.58
RI, NY, NJ, PA)                     $40.71       $52.34
Southeast                           $63.37       $86.78
(DE, DC, FL, GA, MD,                $53.01       $72.12
NC, SC, VA, WV)                     $41.88       $57.30
North Central                       $66.50       $72.00      $155.94
(IL, IN, MI, OH, WI, IA,            $55.39       $70.98       $91.20
KS, MN, MO, NE, ND, SD)             $36.05       $45.00       $50.00
South Central                       $62.26       $89.81      $108.48
(AL, KY, MS, TN, AR,                $44.23       $58.86       $69.88
LA, OK, TX)                         $27.12       $46.10       $60.61
West (CA, OR, WA,                   $78.00       $86.00
AK, HI, AZ, CO, ID, MT,             $72.93       $84.29
NV, NM, UT, WY)                     $67.45       $82.57
National Average (c)                $57.32       $70.29       $86.66
Average Change in Hourly Rates
In First Half 2006:

                                   Dollars Per Hour (High/Average/Low)
                                             2nd Quarter 2006

Tonnage Range                    1000-1499    1500-1999    2000-2999

Northeast
(ME, NH, VT, MA, CT,
RI, NY, NJ, PA)
Southeast                          $115.26
(DE, DC, FL, GA, MD,               $111.36
NC, SC, VA, WV)                    $107.45
North Central                      $199.33      $214.25      $298.32
(IL, IN, MI, OH, WI, IA,           $117.83      $169.47      $227.49
KS, MN, MO, NE, ND, SD)            $108.48      $120.68      $188.03
South Central                      $162.72      $237.30      $339.00
(AL, KY, MS, TN, AR,               $106.23      $153.58      $316.34
LA, OK, TX)                         $67.80       $93.67      $293.68
West (CA, OR, WA,
AK, HI, AZ, CO, ID, MT,
NV, NM, UT, WY)
National Average (c)                $114.66      $166.09      $246.40
Average Change in Hourly Rates
In First Half 2006:

                                     Dollars Per Hour
                                    (High/Average/Low)
                                     2nd Quarter 2006

Tonnage Range                        3000+    Index (b)

Northeast
(ME, NH, VT, MA, CT,                                  73
RI, NY, NJ, PA)
Southeast
(DE, DC, FL, GA, MD,                                  72
NC, SC, VA, WV)
North Central                      $339.00
(IL, IN, MI, OH, WI, IA,           $300.38            73
KS, MN, MO, NE, ND, SD)            $271.20
South Central                      $406.80
(AL, KY, MS, TN, AR,               $377.79            60
LA, OK, TX)                        $348.78
West (CA, OR, WA,
AK, HI, AZ, CO, ID, MT,                              100
NV, NM, UT, WY)
National Average (c)               $316.85
Average Change in Hourly Rates
In First Half 2006:

(a) An adjustment factor is used where data did 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.