Negotiate harder against higher prices
Now may be the time for plant engineers to take a firmer stand against rising prices among providers of construction supplies. Consider, for example, the millwork (SIC 2431) industry.
Now may be the time for plant engineers to take a firmer stand against rising prices among providers of construction supplies. Consider, for example, the millwork (SIC 2431) industry. This industry has made few concessions to weakening construction demand. Over the last 12 mo, millwork tags are down just 55% despite a 5.5% drop in the cost of making a unit of output. Bottom line: Plant engineers who buy millwork products should take a stronger negotiation position.
Stronger negotiation tactics may also serve a legitimate purpose when dealing with producers of precast and other concrete products (SIC 3272). Short-run end-market growth conditions have generated a strong buyers market. Also, profitability analysis indicates inflation-adjusted margins in SIC 3272 are above both their year-ago level and their 5-yr norm. That fact means despite easing demand and the ability to afford a price cut, producers are running in the opposite direction. Last month they pushed prices ahead 0.43%. In 2001, we expect average prices to rise 2.2%.
1Average product price changes are calculated from the producer price index for each 4-digit SIC (standard industrial classification) industry from the U.S. Bureau of Labor Statistics.
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.
3Growth in U.S. end markets data are from the ICE model and are estimates of output for the domestic end markets which purchase a given industry's products.
All data prepared and presented by Thinking Cap Solutions, Inc., Port Angeles, WA (telephone: 360-452-6159; e-mail: email@example.com).
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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