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.

09/01/2005


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).

Price/cost/demand roundup

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 Current month Costs are Grade 3 months ago Current month
(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.
(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 (email: ebaatz@ice-alert.com)
Hand & edge tools (except saws)1.321.87stableF2.702.99
Saw blades & handsaws-0.41-0.44stableF3.283.48
Metal hardware2.073.02stableF3.803.44
Mechanical power transmission equip.3.494.57stableC12.8012.04
Conveyors & conveying equipment3.014.73stableF6.776.55
Cranes, hoists & monorail systems1.733.76stableB3.353.99
Industrial trucks (forklifts) & stackers1.702.31stableD2.783.02
Metal cutting machine tools0.341.11stableB6.866.50
Cutting & machine tool accessories0.630.87stableD8.647.99
Power-driven handtools0.490.69stableF3.994.39
Welding & soldering equipment2.604.32risingC5.895.78
Pumps & pumping equipment2.632.41stableB5.034.92
Air & gas compressors1.382.01stableC6.256.36
Speed changers, drives & gears2.573.58stableB12.8012.04
Power & specialty transformers0.811.67stableD4.053.52
Motors & generators0.971.74stableD6.396.06
Industrial process controls & equip.2.061.99stableA+13.4612.76
Fluid registering & counting devices2.722.28stableC2.892.96
Instruments for electrical testing0.220.34stableB7.567.79





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