Metal prices drop

Basic metal prices fell sharply in 2001. For example, average wholesale prices for U.S.-made steel fell 6.5%, U.S. copper tags declined 16% and domestic aluminum prices dropped 12.6%. But have plant engineers who buy metal products seen any of the deflation benefit? Not enough of it, for while materials costs have been falling, downstream metal producers have managed to pass along only a ...


Basic metal prices fell sharply in 2001. For example, average wholesale prices for U.S.-made steel fell 6.5%, U.S. copper tags declined 16% and domestic aluminum prices dropped 12.6%. But have plant engineers who buy metal products seen any of the deflation benefit? Not enough of it, for while materials costs have been falling, downstream metal producers have managed to pass along only a small portion of the savings to buyers.

Deflation trends in primary metals instead have been used to boost fabricated metal margins. Looking at the Plant Engineering price/cost table we see that makers of metal doors and trim have been the most aggressive deflation opportunists. Thanks to a 3.2% decline in the industry's materials costs, the cost to manufacture metal doors dropped 1.7% between November 2000 and November 2001. But average prices that plant engineers and everyone else paid for metal doors rose 1.3%. As a result, SIC 3442 enjoys a margin grade of A.

The sheet metal work industry (SIC 3444) has also kept a large portion of their metals cost savings from buyers. Here direct manufacturing costs declined 2.3% between November 2000 and November 2001. Buyers of sheet metal work can construct good arguments to capture more cost savings by focusing on the cost of raw materials. We saw per-unit cost declines of 17.4% for stainless steel sheet and strip, 8.1% for carbon steel sheet and strip, and 3.5% for aluminum sheet and plate.

Forecasts from Thinking Cap Solutions suggest such strong deflationary trends will help keep the lid of prices in 2002. Average sheet metal work prices are predicted to rise just 0.5% in 2002.

Price/cost/demand roundup

Industry SIC Average Product Prices Average Product Prices Direct Mfg. Costs Direct Mfg. Costs Growth in U.S. End Markets Growth in U.S. End Markets

the 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.

General Sawmills and Planing Mills2421-6.67-4.86stableF-1.59-2.02
Hardwood Veneer and Plywood24350.840.20fallingA-0.38-1.27
Softwood Veneer and Plywood2436-6.45-3.61stableD-0.38-1.27
Metal Partitions and Fixtures25420.980.79stableB1.630.55
Paints and Allied Products28512.372.40fallingA-1.98-2.60
Flat Glass32110.990.69stableF5.56-2.14
Other Structural Clay Products32596.967.27risingA3.212.10
Gypsum Products3275-25.86-24.43stableD-0.38-0.54
Mineral Wool3296-3.15-1.03stableC1.050.42
Steel Pipe and Tubes3317-0.10-2.10stableB-2.22-4.93
Plumbing Fittings and Brass Goods34320.15-0.83stableB2.411.50
Metal Doors, Sash and Trim34421.411.27stableA2.101.33
Sheet Metal Work34440.630.02stableB6.32-0.37
Refrigeration and Heating Equipment3585-0.22-0.05stableD-3.98-3.41
Current-Carrying Wiring Devices3643-0.78-0.62stableF6.620.71
Noncurrent-Carrying Wiring Devices36441.542.10stableA6.620.71
Commercial Lighting Fixtures36460.17-0.14stableD1.330.17
Environmental Controls38220.260.13stableD0.890.61

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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

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