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Hourly rates held even in fourth quarter.

Custom injection molding machine-hour rates barely budged in the fourth quarter of 1996, according to survey returns from 117 molders. The average decline of less than a percentage point versus third-quarter returns is probably statistically insignificant. Seventy-eight percent of respondents said they did not change their hourly-rate charges in the fourth quarter. Twenty percent said they raised rates (a slightly higher proportion than in the preceding three quarters), and 2% dropped their rates. Those percentages were fairly consistent across all geographical regions.

Although the national average hardly changed, there was distinct movement in particular regions. The South Central and Western regions saw declines of 5-7% in average hourly rates, while the other regions were up an average of 2-4%.

On a year-to-year basis, hourly rates were down an average of 5.1% in the fourth quarter. However, South Central and Western molders' rates averaged higher than a year before. (Note: The apparently big jumps in hourly rates for large machines shown in the table below are probably distorted [TABULAR DATA OMITTED] by the small numbers of molders reporting data on those press tonnages.)

CAPACITY UTILIZATION DIPPED

Custom injection molding machine-capacity utilization suddenly dropped three points in the fourth quarter after trending slowly upward in the second and third quarters of '96. Utilization declined in all regions except the Northeast and North Central areas. The highest average utilization was reported by North Central shops, while those in the West had the lowest utilization. Overall, 39% of respondents said their capacity utilization increased, while 24% saw a decrease and 37% reported no change.

POSITIVE INDICATORS

Optimism remains high. Fifty-eight percent of respondents expect business conditions to improve in the near future, while 14% predict things will get worse and 28% foresee no change. The proportion of optimists was largest in the South Central and West and lowest in the North Central area.

New injection tooling orders - considered a leading indicator of molding activity - increased 3% on a unit basis in the fourth quarter, according to returns from 68 captive and custom mold shops nationwide. New orders were strongest in the Southeast and North Central and weakest in the Northeast.
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Title Annotation:custom injection molding machine-hour rates for the fourth quarter of 1996
Author:Naitove, Matthew H.
Publication:Plastics Technology
Date:Apr 1, 1997
Words:357
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