Motors industry to raise prices

After rising sharply in November, prices for motors and generators (SIC 3621) retreated 0.14% in December 2002. Prices for fractional horsepower engines, down 0.8%, led the deflationary charge. On the cost front, per-unit spending on manufacturing rose 0.3% thanks to a 1.4% jump in wages paid to factory floor workers.

03/15/2003


After rising sharply in November, prices for motors and generators (SIC 3621) retreated 0.14% in December 2002. Prices for fractional horsepower engines, down 0.8%, led the deflationary charge. On the cost front, per-unit spending on manufacturing rose 0.3% thanks to a 1.4% jump in wages paid to factory floor workers.

Thinking Cap Solutions estimates industry prices in the motors industry must rise an average of 1.5% in order to generate a fair return on manufacturing-related spending. To get a return equal to the one earned a year ago requires a much smaller increase of 0.2%. This means cost/margin-based negotiation strategies favor suppliers. Luckily, demand trends favor buyers. Year-over-year end market growth for SIC 3621 remains mired in negative territory. Buyers can use weak demand conditions as leverage at the negotiation table.

Meanwhile, plant engineers who are buying speed changers, drives, and gears (SIC 3566) face a different environment. After three months of increases, prices for speed changers, drives and gears took a breather, remaining flat in December. On the cost front, per-unit spending on manufacturing edged ahead 0.07% thanks to a 0.35% jump in wages paid to production workers.

Our economic analysis indicates SIC 3566 can afford to lower tags by an average of 1.2% and still earn a fair return on manufacturing-related spending. The road will not be smooth as producers of speed changers and gears struggle with inflation concerns. A roundup of 12-month cost increases shows: U.S.-made raw materials, up 2.2%; imported materials, up 1.7%; production worker wages, up 4.7%; fuels, up 22.5%; and inbound freight, up 3.5%. Note that fuel costs are a negotiation red herring because fuel represents a relatively minor budget item.

Price/cost/demand roundup

Industry

SIC

Average Product Prices

Average Product Prices

Direct Mfg. Costs

Direct Mfg. Costs

Growth in U.S. End Markets

Growth in U.S. End Markets


the average producer in an industry. Grades of A to A+ mean plant engineers may be able to strike a better bargain with suppliers and better control plant costs.

Other Hand and Edge Tools

3423

2.21

0.96

stable

C

-0.38

0.33

Hand Saws and Saw Blades

3425

0.27

1.03

stable

D

-2.03

-0.38

Other Hardware

3429

1.29

0.90

stable

C

-2.03

-0.31

Other Power Transmission Equipment

3568

1.78

1.78

stable

C

-5.97

-2.67

Conveyors and Conveying Equipment

3535

0.83

0.32

stable

C

-4.04

-3.62

Hoists, Cranes and Monorails

3536

0.71

0.59

stable

B

-4.52

-4.85

Industrial Trucks and Tractors

3537

-0.02

-0.07

stable

F

-1.52

-0.63

Metal-Cutting Machine Tools

3541

-4.84

-4.11

stable

D

-7.21

-4.43

Machine Tool Accessories

3545

0.90

0.41

stable

D

-2.51

0.68

Power Driven Hand Tools

3546

0.64

0.24

stable

F-

-1.43

-0.77

Welding Apparatus

3548

1.43

1.11

stable

C

-3.78

-2.47

Pumps and Pumping Equipment

3561

2.66

2.15

stable

B

-4.05

-2.33

Air and Gas Compressors

3563

2.17

1.98

stable

A

-4.05

-2.33

Speed Changers, Drives and Gears

3566

1.25

1.09

stable

B

-5.97

-2.67

Transformers

3612

-1.89

-2.01

stable

F

-4.83

-2.90

Motors and Generators

3621

-0.11

0.07

stable

F

-5.36

-2.65

Process Control Instruments

3823

1.37

1.19

stable

A

-2.33

-0.95

Fluid Meters and Counting Devices

3824

0.35

0.88

stable

A

-2.33

-0.95

Instruments to Measure Electricity

3825

0.81

0.73

stable

B

0.21

3.43





No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
Safety standards and electrical test instruments; Product of the Year winners; Easy and safe electrical design
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Diagnostic functions for system safety; Specifying industrial enclosures; Effective decision support for a crisis
Transformers; Electrical system design; Selecting and sizing transformers; Grounded and ungrounded system design, Paralleling generator systems
Natural gas for tomorrow's fleets; Colleges and universities moving to CHP; Power and steam and frozen foods

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me