Negotiation opportunities on the rise
Factory managers who are buying equipment and tools have some great negotiation opportunities now. For example, consider the speed changers, drives, and gears industry. Suppliers in SIC 3566 have a habit of hiking prices in the fourth quarter.
Factory managers who are buying equipment and tools have some great negotiation opportunities now. For example, consider the speed changers, drives, and gears industry. Suppliers in SIC 3566 have a habit of hiking prices in the fourth quarter. In the last 4 yr, these increases have gone well beyond the amount required to offset the effects of higher manufacturing costs. Based on the most recently available data, a 2% price hike from October to January is not out of the question.
But such a hike should be easy for buyers to challenge. Data shows that manufacturing costs are up just 1.34% since September 1998. The astute buyer can fight a proposed price hike with a two-pronged attack. First, use weak demand as a weapon. For the year ending in September, U.S. end markets for SIC 3566's products are estimated to have contracted by 0.71%. Second, use a cost savings argument that focuses on domestic raw materials. Although labor rates in SIC 3566 are up 6.56% since September 1998, costs associated with U.S. made raw materials are down 1.37%.
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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