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Hourly rates dipped again last quarter.

Despite signs that the recession was ending in the second quarter, survey returns from 193 custom injection molders show that average machine-hour rates dipped 1.1%. That was the third decline in the past four quarters; perhaps the 6.3% uptick in rates during the first quarter reflected an attempt by processors to catch up some ground lost to inflation in the latter half of 1990.

Note that in two regions of the country--Southeast and West-average rates actually increased in the second quarter, and they were unchanged in North Central states. Likewise, rates were hiked on presses under 100 tons and over 749 tons, while they declined for the intermediate tonnages.

Since the second quarter of last year, average rates increased only 1.8% nationwide. In truth, rate gains were seen only in the Southeast and North


Central markets; all other regions lost ground for the year. Also, rates for larger presses tended to increase more than for smaller machines during the period.

At the far right of the table below, the Index column shows the relative level of machine-hour rates for each region, averaged over all press sizes. The West has consistently showed the highest rates (Index = 100) and the South Central the lowest. However, during the past four years, South Central machine-hour rates have been gradually creeping up relative to those in other regions. The same is true of the Northeast. At the same time, hourly rates of Southeastern and North Central molders have gradually declined, making them steadily more competitive.
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:machine-hour rates for custom injection molders
Author:Naitove, Matthew H.
Publication:Plastics Technology
Date:Oct 1, 1991
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