Strong demand may cause supply problems

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

12/01/2000


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).





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