Price inflation affects limited area

Pressure to hike prices remains relatively low. In the 12-month period ending March 2002, product price inflation accelerated in only four industries from the PLANT ENGINEERING factory equipment and tools roundup. Average prices for other hand and edge tools rose 5.6%, tags for pumps grew 2.7%, welding apparatus prices rose 1.


Pressure to hike prices remains relatively low. In the 12-month period ending March 2002, product price inflation accelerated in only four industries from the PLANT ENGINEERING factory equipment and tools roundup. Average prices for other hand and edge tools rose 5.6%, tags for pumps grew 2.7%, welding apparatus prices rose 1.9% while average air and gas compressors tags grew 2.7%. All four of these industries, along with five others, enjoyed an A margin grade. That means manufacturing-related margins are near record-level highs, and buyers have some negotiation room to push for lower prices.

A widespread resurgence in inflation for basic metals may begin to threaten the bottom line. In March 2002, prices for aluminum increased 2.7%, while prices for steel mill products rose 2%. Tools producers, however, are being aggressive about protecting themselves. Consider air and gas compressors. Here, increased spending on basic metals helped push per-unit spending on raw materials ahead by 0.13% from February to March. But producers countered this increase with a 0.8% price hike. The cost/price inflation disparity added 39 cents to the bottom line for each $100 of product sold. Margins in the air and gas compressors industry now stand just six cents short of their 1986-2002 record high.

Returning manufacturing-related margins to their 5-yr average level would require air and gas compressor manufacturers to lower average prices by 2.5%. Other industries that can afford to lower prices (and their 5-yr average price targets) include: other hand and edge tools (-4.4%), other hardware (-3.6%), other power transmission equipment (-4.7%), conveyors (-4.3%), hoists and cranes (-3.5%), welding apparatus (-3.5%), and pumps (-3.6%).

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.

Other Hand and Edge Tools34232.923.57risingA-0.90-2.31
Hand Saws and Saw Blades3425-0.56-0.70risingC-1.68-1.59
Other Hardware34291.811.79stableA-2.28-2.04
Other Power Transmission Equipment35681.881.88stableA-6.94-6.69
Conveyors and Conveying Equipment35351.661.55stableA-3.31-5.53
Hoists, Cranes and Monorails35361.651.30stableA-0.77-1.93
Industrial Trucks and Tractors35371.250.91stableA-3.55-5.45
Metal-Cutting Machine Tools3541-1.97-3.62stableF--6.59-9.17
Machine Tool Accessories35451.941.87stableC-6.28-6.71
Power Driven Hand Tools35461.971.91stableC-0.60-0.79
Welding Apparatus35481.731.91stableA-4.66-3.59
Pumps and Pumping Equipment35612.402.72stableA-2.58-3.18
Air and Gas Compressors35631.942.12stableA-2.58-3.18
Speed Changers, Drives and Gears35662.081.80stableA-6.94-6.69
Motors and Generators36210.410.29stableD-1.93-4.77
Process Control Instruments38231.481.42stableB-4.39-2.56
Fluid Meters and Counting Devices38241.140.49stableC-4.39-2.56
Instruments to Measure Electricity38250.610.64stableF-4.46-10.08

Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
June 2018
2018 Lubrication Guide, Motor and maintenance management, Control system migration
May 2018
Electrical standards, robots and Lean manufacturing, and how an aluminum packaging plant is helping community growth.
April 2018
2017 Product of the Year winners, retrofitting a press, IMTS and Hannover Messe preview, natural refrigerants, testing steam traps
June 2018
Machine learning, produced water benefits, programming cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
April 2018
Implementing a DCS, stepper motors, intelligent motion control, remote monitoring of irrigation systems
February 2018
Setting internal automation standards

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
Maintenance & Safety
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me