Welding equipment industry sees margins increase
The green inflation light is flashing for industries that make factory equipment and tools. Among 19 industries in the PLANT ENGINEERING price index, inflation slowed down for only three. Fifteen industries, on the other hand, put the metal to the petal as the rate at which inflation sped up increased from March 2005 to June 2005.
The green inflation light is flashing for industries that make factory equipment and tools. Among 19 industries in the PLANT ENGINEERING price index, inflation slowed down for only three. Fifteen industries, on the other hand, put the metal to the petal as the rate at which inflation sped up increased from March 2005 to June 2005. Only one-saw blades and handsaws-cut its average product prices.
The top five price hike culprits can be found among manufacturers of conveyors (which registered a 4.7% increase in average product prices), mechanical power transmission equipment (4.6%), welding & soldering equipment (4.3%), cranes, hoists & monorail systems (3.8%), and speed changers, drives & gears (3.6%). The first three industries in this list (conveyors, transmission equipment, and welding equipment) have demonstrated the sharpest inflationary change compared to the 12-month period ending June 2004 as well.
Trying to find ways to negotiate these inflation rockets back to earth can be a tough proposition, especially when margins remain tight. Five industries have failing "F" grades in their margins, including the conveyor industry. But some do offer opportunity for haggling.
Consider the welding and soldering equipment industry. The cost of manufacturing continues to increase, but price inflation for the welding equipment that plant engineers buy has outpaced costs. As a result, this industry has enjoyed a margin increase of $1.59 for every $100 worth of final product sold. Two others boast even better margin gains, transformers (up $2.24) and cranes and hoists ($4.82).
Factory equipment & tools
Average Product Prices (1) % Change During 12 Months Ending
Direct Manufacturing Costs (2) and Margins Grade
Growth in U.S. End Markets (3) % Change During 12 Months Ending
3 months ago
3 months ago
(1) Average product price changes are calculated from the producer price index for each 6-digit NAICS (North American Industry Classification System) industry from the U.S. Bureau of Labor Statistics.
Hand & edge tools (except saws)
Saw blades & handsaws
Mechanical power transmission equip.
Conveyors & conveying equipment
Cranes, hoists & monorail systems
Industrial trucks (forklifts) & stackers
Metal cutting machine tools
Cutting & machine tool accessories
Welding & soldering equipment
Pumps & pumping equipment
Air & gas compressors
Speed changers, drives & gears
Power & specialty transformers
Motors & generators
Industrial process controls & equip.
Fluid registering & counting devices
Instruments for electrical testing
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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