Supply and demand side of engineering

With margins at record levels in many industries that make equipment and tools, plant engineers may find negotiating for a better deal a bit easier these days.
By Staff June 1, 1999

With margins at record levels in many industries that make equipment and tools, plant engineers may find negotiating for a better deal a bit easier these days. Of 19 tools and equipment industries tracked by Plant Engineering , 13 sport record-high to near-record-high margins.

Some simple statistics will make the cost/price picture clear. In the hand and edge tools industry, between March 1998 and March 1999, the average product price rose 1.1%. Meanwhile, the average direct costs to produce hand tools fell 2.3% over the same time, thanks to sharp cost declines in carbon steel and alloy steel. In the handsaws and saw blades industry, average product prices actually fell 0.2%. But manufacturing costs, again due to metals price deflation, dropped 4.1%. In these diverging price/cost trends, factory managers will find their case for price concessions.