Strong demand may cause supply problems

Plant engineers may find that buying factory equipment and tools is getting a bit tougher these days.

By Staff December 1, 2000

Plant engineers may find that buying factory equipment and tools is getting a bit tougher these days. That’s because with the economy so hot these days, many of the industries that make plant engineering equipment have been enjoying record-breaking demand. As a result, factory managers who buy the equipment may find suppliers are allocating product to their most loyal customers before taking new orders.

As the Plant Engineering price/cost/demand table (on opposite page) shows, end-market demand for instruments that measure electricity is particularly strong, up 48.14% in the 12-mo period ending September 2000 after growing at a 42.22% pace in the 12-mo period ending June 2000. The markets that buy transformers, motor and generators, and metal-cutting machine tools and motors and generators are also exceptionally strong, up 31.04%, 23.84% and 14.45%, respectively.

Price/cost/demand roundup

IndustrySICAverage Product Prices1Change, % During 12-Mo Ending. Jun 00Average Product Prices1Change, % During 12-Mo Ending. Sep 00Direct Mfg. CostsDirect Mfg. CostsGrowth in U.S. End Markets3Change, % During 12-Mo Ending. Jun 00Growth in U.S. End Markets3Change, % During 12-Mo Ending. Sep 00

Other hand and edge tools
3423
1.07
1.07
stable
C
6.41
7.21

Hand saws and saw blades
3425
0.10
0.24
stable
C
4.59
4.54

Other hardware
3429
2.28
2.20
Stable
A
5.27
4.91

Other power transmission equipment
3568
1.73
1.24
Stable
B
3.21
5.07

Conveyors and conveying equipment
3535
1.13
1.13
Stable
A
2.27
5.62

Hoists, cranes, and monorails
3536
1.64
1.59
Stable
A+
4.42
6.12

Industrial trucks and tractors
3537
0.31
0.66
Stable
D
4.40
7.30

Metal-cutting machine tools
3541
0.63
0.64
Stable
D
11.81
14.45

Machine tool accessories
3545
0.55
0.79
Stable
D
9.31
9.63

Power driven hand tools
3546
0.37
0.21
Stable
D
4.18
4.26

Welding apparatus
3548
1.48
1.73
Stable
B
3.30
2.39

Pumps and pumping equipment
3561
1.70
1.63
Stable
A
3.20
3.84

Air and gas compressors
3563
1.25
1.11
Stable
C
3.20
3.84

Speed changers, drives, and gears
3566
2.05
2.03
Stable
C
3.21
5.07

Transformers
3612
3.20
2.82
Rising
C
28.95
31.04

Motors and generators
3621
-0.07
0.03
Stable
F
24.16
23.84

Process control instruments
3823
0.79
1.06
Stable
C
1.44
-1.25

Fluid meters and counting devices
3824
0.86
1.70
Stable
F
1.44
-1.25

Instruments to measure electricity
3825
0.88
1.51
Stable
F
42.22
48.14

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.

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 industrys products. All data prepared and presented by Thinking Cap Solutions, Inc., Port Angeles, WA (telephone: 360-452-6159; e-mail: ebaatz@ice-alert.com).