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Machine-hour rates rebounded in third quarter.

Machine-Hour Rates Rebounded in Third Quarter

After dropping 1.8% in the first quarter, and 3.6% in the second, average custom injection molding machine-hour rates rose 3.7% in the third quarter of 1989. That left average rates about 2% below where they were at the end of 1988, according to returns from 145 molders nationwide in PLASTICS TECHNOLOGY's latest quarterly survey.

That third-quarter rebound in rates contrasts with an abrupt softening in machine capacity utilization by custom injection molders that took place during the same period. (see PLASTICS TECHNOLOGY's latest Manufacturing Activity Index, Jan. '90, p. 99).

As shown in the "Index" column of the table below, the West again reported the highest average prices for custom molding services, and New England is again next in line, while the Southeast averaged among the lowest prices, as usual. In fact, the Southeast was one of only two regions whose average hourly rates continued to drop in the third quarter, the other being the West.

Compared with the end of 1988, third-quarter hourly rates had softened the most in the Southeast and West, and only New England's rates were actually ahead of 1988 levels.

Analyzed by machine size, hourly rates since the end of 1988 declined most in the 750-999 ton range, and held almost even in under 100 tons. Machines of 1000 tons and over were the one category showing an increase in rates over three quarters of 1989.

As in past surveys, a "correction factor" was added to the overall averages to make up for the fact that only half the respondents said their hourly rates included direct labor and profit (see footnote to the table). [Tabular Data Omitted]
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Plastics Technology
Date:Feb 1, 1990
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