Steel pipe and tubes earn high grade

Every month this column presents a snapshot of the industries that provide key supplies to plant engineers. This issue, we examine a single one in depth: steel pipe and tubes (SIC 3317). This industry gets an A in the "margins grade" column as the typical supplier of pipes and tubes has seen the prices charged for his products rise faster than the cost of manufacturing.


Every month this column presents a snapshot of the industries that provide key supplies to plant engineers. This issue, we examine a single one in depth: steel pipe and tubes (SIC 3317).

This industry gets an A in the "margins grade" column as the typical supplier of pipes and tubes has seen the prices charged for his products rise faster than the cost of manufacturing. In this case, SIC 3317 pushed through an average price hike of 13.2% from 1996 to the present. Over that same seven-year period, the total cost of manufacturing in SIC 3317 fell 1%. As a result, according to our analysis, now the industry is sitting on a $2.70 margin surplus for every $100 of product sold. Seems like a slam dunk for any buyer who wants to cut costs by hammering for a better price, right? Not exactly.

For one thing, overhead spending on nonproduction salaries and benefits as well as business services and consulting contracts grew 24.8%. Furthermore, the prices we examine in our monthly table represent an average for lots of different product lines. (These price data come from surveys conducted monthly by the U.S. Department of Labor). Product lines often behave quite differently from the average.

In August 2003, for example, prices for alloy steel pipe and tubing soared 30.5% from the same month a year ago. Prices for carbon steel mechanical tubing, meanwhile, declined 2.8%, and structural pipe and tubing made of the same material also fell 5.6%.

Nonetheless, the average data can lead to worthwhile price forecasts. In SIC 3317, we see aggregate prices falling 2.3% in 2004 after a 6.3% hike in 2003. Striking a better deal than average will always mean delving deeper into your supplier's or distributor's cost structure.

Price/cost/demand roundup

Average Product Prices1Change, %, During 12-Mo Ending... Direct Mfg. Costs2and Margins Grade Growth in U.S. End Markets3Change, %, During 12-Mo Ending...
Industry SIC May 03 August 03 Costs are... Grade May 03 August 03
NC means data could not be computed.
1 Average 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.
2 Analyses of each industry's direct manufacturing cost changes are from Thinking Cap Solutions, Inc.'s proprietary Industry Cost Escalation (ICE) model. The "grade" indicates that recent price/cost changes have produced record high (A+) margins to average margins (C) to record low (F-) margins for 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.
3 Growth 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 industry's products.
All data prepared and presented by Thinking Cap Solutions, Inc., Port Angeles, WA (telephone: 360-452-6159; e-mail:
General Sawmills and Planing Mills2421-2.26-0.84risingC-1.35-2.02
Hardwood Veneer and Plywood2435-0.91-2.18risingD-0.83-0.85
Softwood Veneer and Plywood2436-6.20-0.55risingB-0.83-0.85
Metal Partitions and Fixtures2542-0.390.11risingF-2.48-2.28
Paints and Allied Products28511.692.09stableB1.020.69
Flat Glass3211-0.550.12stableF9.199.17
Other Structural Clay Products32596.445.57stableA-1.43-0.97
Gypsum Products32756.923.14stableD-2.79-2.64
Mineral Wool32960.620.08stableF-0.240.90
Steel Pipe and Tubes33178.929.16stableA1.090.32
Plumbing Fittings and Brass Goods34320.680.81stableF--1.76-1.38
Metal Doors, Sash and Trim34420.941.07stableC-2.31-2.04
Sheet Metal Work34441.971.67risingD5.385.62
Refrigeration and Heating Equipment35850.380.38stableF-0.840.62
Current-Carrying Wiring Devices36430.340.40stableF-3.083.83
Noncurrent-Carrying Wiring Devices36441.02-0.71stableD3.083.83
Commercial Lighting Fixtures36460.721.34stableD-1.16-1.10
Environmental Controls38220.140.11stableF-1.55-1.34

Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2017 Top Plant.
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.
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
March 2018
SCCR, 2018 Maintenance study, and VFDs in a washdown environment.
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
December 2017
Product of the Year winners, Pattern recognition, Engineering analytics, Revitalize older pump installations
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

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

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.
Maintenance & Safety
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Industrial Analytics
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
IIoT: Operations & IT
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
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