(This week's post is a review of FOUNDRY MANAGEMENT AND TECHNOLOGY Magazines' 2017 Metalcasting Outlook. You need to register to read the full report, "2017 Metalcasting Outlook.")
A complex industry like metalcasting never matches overall business trends. It has its own operating rules, its own advantages, and its own vulnerabilities that confound the perspective of finance-based analysis.
Each year, during September and October, FM&T surveys metalcasters to measure the outlook of men and women responsible North America’s foundries and diecasting plants. We seek to identify the problems they face in their businesses and the economy, to learn what plans they're making for the coming business cycle, and to understand better they're expectations for the year ahead.
We surveyed readers by email over a period of six weeks, with a detailed study that focuses on the metalcasting business, its risks and prospects, and the internal and external factors shaping its progress. Their perspective — presented here — is valuable not only because of their insights and advantages, but because they occupy positions that are critical to the prospects of so many other elements of the global industrial economy.
(Who was surveyed?)
24.0% of respondents are attached to large foundries, with 100 to 249 total employees; 20.9% represent mid-sized foundries (50-99 workers), and a nearly equal portion (20.2%) represent small plants, with 20-49 employees.
(Who will increase shipments and who won't?)
A plurality of all respondents, 42.1%, indicated that 2016 shipments will fall below 2015 shipments; the remaining respondents were nearly evenly split, with 29.4% saying the current year’s shipments will increase over last year, and 28.6% concluding that 2016 shipments will be about the same as the 2015 tonnages. Even those respondents whose current year shipments are on track to improve over the 2015 results are not growing vigorously: 55.3% of these respondents indicated that the current year’s results will rise 1 to 10% over last year; 27.7% are expecting 10-25% improvements; and 12.8% are expecting a 26-50% improvement. On the other hand, of respondents who are anticipating an overall decline in 2016 year-over-year shipments, 23.7% expect this year’s results to be 1-10% less than the 2015 result; 37.3% anticipate the current year’s tons/shipped to fall 10-25% lower than last year’s total, and an equivalent 37.3% indicate that 2016 tons/shipped will fall 26-50% below the 2015 total. Large (100-249 employees) operations are decidedly more likely than other types of foundries to forecast improved shipment totals for 2017 than they’ve had in the current year. Small (20-49 employees) and midsized (50-99 employees) are slightly above the average in their optimistic outlook about 2017 shipments.
(What is being invested in?)
43.2%, indicate they will be increasing capital spending next year, while another 36% note they will be maintaining their 2016 levels of investment; 20.8% indicated they will decrease capital investment totals for 2017. Large foundries (100-249 workers) are the most likely to be planning to increase capital investments in 2017, while very large foundries (over 250 workers) are the most likely to be planning to decrease spending. The most popular choice (23.9% of all respondents) is for new product testing/inspection technology; grinding equipment (22.9%) was the next most popular choice, followed by pollution controls (22.0%) and blast cleaning equipment (21.1%.) These are followed by robotics technology (19.3%) and, in a tie, lab testing equipment and melting systems (both at 18.3% of the total.)
(What are the growth markets?)
We also asked respondents to identify market segments that would support metalcasting industry growth and improvement: “Infrastructure and construction” programs were identified by 21.1% of respondents, while “Oil/natural gas” projects were tabbed by 18.7% of respondents.
As 2017 arrives the metalcasting industry can be confident it has the experienced personnel, strategic insights, and technological resources to drive almost any growth strategy, or to combat any challenge to its stability and resourcefulness.
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