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Hourly-rate upturn due?

Hourly-Rate Upturn Due?

Average custom injection molding machine-hour rates fell three percentage points in the third quarter of 1991, after dropping one point in the second quarter and increasing six points in the first quarter. However, there is some basis for hope that rates will turn up in this first quarter of '92.

Based on an analysis of trends from 1988 through 1991, PLASTICS TECHNOLOGY observed an apparent correlation between our quarterly survey data for custom injection molding hourly rates and for machine capacity utilization (see last month's Manufacturing Activity Index). The two curves exhibit a similar shape, but with a time difference of about two quarters. In other words, changes in capacity utilization appear to be a six-month leading indicator of changes in hourly rates. Capacity utilization dropped slightly in the second quarter and showed a sizable uptick in the third quarter, suggesting that hourly rates might bottom out in the fourth quarter of '91 and rebound somewhat in the following quarter.

As for the third-quarter decline in hourly rates relative to the second quarter, Northeastern and North Central molders got off lightly by comparison with other regions. Nationwide average rates for that quarter were virtually identical with those a year earlier. But rates in the Northeast, Southeast and South Central area declined from a year ago, while they increased in the North Central region and stayed the same in the West.


In response to reader requests, we are providing a finer breakout of clamp-tonnage categories at both the large and small ends of the machine size range. Readers said this would provide more useful comparisons by narrowing the tonnage spread within individual categories. The new categories will first appear in our fourth-quarter survey, which will be published in April.
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Title Annotation:injection molding machine hour rates
Author:Naitove, Matthew H.
Publication:Plastics Technology
Date:Jan 1, 1992
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