DURABLE GOODS DEMAND LEADS TO OPTIMISTIC TOOLING FORECAST by Dianna Brodine, managing editor, The American Mold Builder
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s the US economy recovers from the impact of the pandemic, consumers continue their dramatic increase in durable goods purchases. This spells good news for toolmakers in automotive, aerospace, appliance and more. ECONOMIC IMPACTS In November, Harbour Results Director Cara Walton spoke to a group of plastic processing professionals to highlight the positive and negative factors influencing today’s US economy. When the COVID-19 virus first landed in North America, uncertainty and caution caused an initial, sharp downturn as manufacturing production dropped (or stopped), retail businesses shuttered and hospitals handled overflowing patient volume.
complaining about government aid and people who don’t want to work, the fact is that the overall labor market may be down 3.55 million employees from pre-COVID-19 numbers, but the manufacturing industry is down only 374,000 employees. The current labor problem is a result of the 37% increase in durable goods demand – manufacturers need more employees than they did before.
The governmental response to that downturn – an influx of stimulus for businesses and individuals – increased the US debt, which has lowered the value of the US dollar to Chart 1. Demand is strong through 2025 for several major markets impacting the tooling industry. where its reaching parity with the Yuan and the Canadian dollar, Walton said. This is not great The stratospheric increase in durable goods demand is a news for North American toolmakers. And, Walton pointed direct result of the pandemic. “Consumers have changed out, the only way to pay down that debt is to either raise GDP what they spend money on,” said Walton. “And, the demand or increase taxes. In addition, supply chain issues have led to is sustainable.” challenges in raw material availability and pricing increases. MARKET OUTLOOK BY SEGMENT On the other hand, “Low interest rates mean borrowing money “From a broad industry perspective, there’s no market that’s is easy and cheap,” said Walton. “Jobless claims are decreasing, not doing well,” said Walton. (see Chart 1). “Most markets are housing starts are consistent and consumer spending is up.” in a solid spot right now, although there will be a little bit of a slowdown on the production front, rather than the tool building Lower jobless claims are a relief for unemployment funding front, as markets try to figure out what a normalized demand but add additional pressure to manufacturers and toolmakers looks like. But, industries will have to launch new models – struggling to find employees. According to Walton’s numbers, cars, appliances, etc. – because the demand is continuing and there are approximately 900,000 open positions in US consumers want what’s new.” manufacturing. Although employers spend a lot of time 18
the american MOLD BUILDER | Issue 4 2021
