WJI Jan 2018 Feature Sample

WIRE JOURNAL JANUARY 2018

®

INTERNATIONAL www.wirenet.org

SPRINGS

Report to Members

 2018 Officers

OFFICIAL PUBLICATION OF THE WIRE ASSOCIATION INTERNATIONAL

.COM

Wire & Spring Manufacturing in the US March 2017

4

ustry at a Glance

g Manufacturing in 2017

cs

SPRINGS: ready to 1.0% slowly exit losses $9.2bn -0.3%

FEATURE

Revenue

ex

teel

uction

Annual Growth 17-22

This feature, starting below, presents excerpts from Wire & Spring Manufacturing in the Businesses Exports a 2017 report from IBISWorld, Inc.; observations from both an industry veteran and a consultant; looks at spring equipment and extremes, a wrapup of the 2017 SMI event and a weighty issue. Also, do see the tech paper that starts on p. 56.

Profit U.S.,

$635.0m

1,040

$1.3bn

Industrial production index

Revenue vs. employment growth

It could have been better, 12 it could have been worse 6

Platt

Drivers

Annual Growth 12-17

10 5

p. 31

% change

% change

The market outlook for wire and spring through 2022 is 0 good, not great, but better than the last five years, a0 mixed -6 bag assessment that, given turbulent times, may not be -5 such -12 a bad thing.

Per the 2017 report from IBISWorld, Inc., the combined -18 for wire and springs from 2012 to 2017 is -10 market expected to -24 close with modest annual losses (-0.3%). Looking -15 Year over Year 09it sees 10 11 positive 13 15 results 17 19(1.0%) 21 23 forward, to $9.7 billion Revenue the five years to 2022,Employment including a 0.9% increase in 2018.

Products and services segmentation (2017)

2.3%

Steel nails, staples and similar products Wire mesh and other woven wire products

8.5%

10.8%

Steel wire rope and cable

d index

12

market share concentration and continual product innovation are all characteristics of a mature industry.

Enterprise and establishment numbers have been falling during the 10-year period. Larger operators such as Barnes Group (Associated Spring) have been closing underperforming facilities, while smaller players are either being acquired by larger competitors or exiting the industry. Underperforming product lines are also being discontinued or offshored to lower-cost manufacturing facilities abroad. The industry’s prod14 16 18 20 22 uct segments are clearly defined and have been for several decades. However, commoditization of spring SOURCE: WWW.IBISWORLD.COM and fabricated wire products continues to increase price-based competition and encourage domestic operators to develop new value-added products.

25.5%

Light gauge springs

Heavy-weight spring outlook

Heavy gauge springs are expected to account for a com14.4% Heavy gauge springs bined 14.4% of industry revenue. Within this segment, hot 23.5% formed steel springs products Nonferrous wire products account for 49.6% of segment p. 5 revenue, while cold-formed 15.0% Other fabricated wire products SOURCE: WWW.IBISWORLD.COM steel springs account for the SOURCE: WWW.IBISWORLD.COM remaining 50.4% share. HotA breakdown of the major elements of the U.S. wire and spring market, including heavy formed springs are usually ucture Life Cycle Stage Mature Regulation Level Medium and light gauge springs.

Chart courtesy of IBIS. made from spring material Revenue Volatility Low Technology Change Medium (e.g. steel alloy rods) with Capital Intensity Low Barriers to Entry Low a diameter over one-half inch. In contrast, cold-formed Industry Assistance Medium Industry Globalization Medium Maturity is overrated...for industry springs are typically made from steel rods with a diameter Concentration Level Low Competition Level High under one-half inches.

The wire and spring manufacturing industry is in the The U.S. automotive, truck and bus manufacturing mature phase of AND itsTIME lifeSERIES cycle.

1038years to 2022, FOR ADDITIONAL STATISTICS SEE THEOver APPENDIXthe ON PAGE industries are the main purchasers of heavy gauge springs.

Industry Value Added (IVA), which measures an industry’s Heavy industrial customers, as well as construction vehicle contribution to GDP, is expected to increase at an annuProvided to: rate IBISWorld Staffwhile Member (2127604530) December alized of 1.1%, GDP is expected |to06grow at an 2017 and mass transit vehicle manufacturers, also contribute to this segment’s revenue. Products include automobile susannualized rate of 2.0% during the same period. Although pension springs, coiled springs, disk and ring springs, flat the industry is expected to grow at a slower pace than the springs, helical springs, leaf springs and torsion bars. economy as a whole, well-defined product segments, low

44 | WIRE JOURNAL INTERNATIONAL

IBISWORLD.COM

Wire & Spring Manufacturing in the US March 2017

4

ndustry at a Glance

Statistics pshot

Revenue

Annual Growth 12-17

Annual Growth 17-22

Profit

Exports

Businesses

$9.2bn $635.0m

1.0% 1,040

$1.3bn

Industrial production index

Revenue vs. employment growth

ket Share

By the numbers, the last five years have not been easy for 12 10 the spring industry. IBIS chart.

gett & Platt

6

5

0

% change

% change

%

0

Light-weight spring outlook -6

-12

-5

Light gauge springs (.125 in. or -10smaller) are expected -18 -24 -15 to account for a 25.5% share of industry revenue in 2017.

Year Year 09 11 13 15 17 19 21 23 10 12 14 16 18 20 22 Within this product segment, precision mechanical wire Revenue Employment springs account for an estimated 46.5% of segment reveProducts and services segmentation (2017) nue.

The remaining 53.5% 2.3% share of the segment is repreSteel nails, staples sented by other flat springs, furniture innerand similar products 8.5%types, from Wire mesh and other woven wire products springs and gun springs to hairsprings, helical 25.5%springs and Light gauge springs 10.8% extension springs.

Steel wire rope and cable Standardized, lower-margin springs within this segment are mainly used in upholstered furnishings, mattresses and consumer 14.4% electronics. In contrast, highly customized, preHeavy gauge springs cision springs are essential components in the production SOURCE: WWW.IBISWORLD.COM

p. 31

External Drivers

strial uction index

d price of steel

e of construction

e-weighted index

stry Structure

-0.3%

of aerospace components, assembly line machinery, industrial valves and other technical products. Since light gauge springs are used in such a wide range of different manufacturing industries, demand for these products has grown relatively in line with the overall economy over the past few years. Accordingly, this segment’s share of industry revenue has increased slightly over the five years to 2017.

Spring future may include 3D printing The industry’s reliance on technology varies across segments, as do their related advancements. Over the past three decades, the almost ubiquitous adoption of CNC routers, formers and other robotic machinery has revolutionized efficiency across fabricated metal manufacturing sectors. These advancements have gradually changed the production process for most industry participants, although the greatest degree of change has occurred within the industry’s light gauge springs product segment.

While the industry has historically been characterized by a slow pace of technological innovation, gradual adoption of 3D printing and newer technological developments are likely to have a major effect on the industry over the next five years.

23.5%

Nonferrous wire products p. 5

15.0% 150 years ago, one spring-related idea just ‘clicked’ into place Other fabricated wire products

SOURCE: WWW.IBISWORLD.COM SOURCE: WWW.IBISWORLD.COM

Life Cycle Stage

Mature Regulation Level Medium Spring ingenuity goes way back, and sometimes a simLow Technology Change Medium ple idea can be a lasting one.

1829, Capital Intensity Low In Barriers to EntryJames Chesterman, Low Industry Assistance Industry Globalization an Englishman, patentedMedium the spring tape measure. FastMedium Concentration Level Low Competition Level forward to 1868, and the first U.S. patent (#79,965) wasHigh issued to a Connecticut man who had an improvement.

in a suitable sheet-metal barrel, as shown at b, and attaching its inner end to the arbor or stud h, and its outer end to the periphery or rim of the barrel, as is done in watches, & c., as indicated in Fig. 2. On this stud or arbor h, and outside of the head b of the main-spring barrel, I fit a piece of sheet metal as b', in Provided to: IBISWorld Staff Member (2127604530) | 06 December 2017 such a position that its outer Be it known that I, Alvin end will rest in the periphery J. Fellows, of the city and of the case, as shown at c, county of New Haven, in the Fig. 2.

State of Connecticut, have To this plate or piece I invented a new and useful attach the spring-click, as Improvement in Spring shown at d d', in such a Measuring Tapes. ... Fig. 1 is manner that the working end an enlarged perspective view d' will hook over the edge of of the apparatus as it will the arm c, of the knob f, in appear when ready for use. such a manner that the click, Fig. 2 is a plan of the same, acting against the projection with the movable side taken g g, & c., on the barrel, will off, showing the internal structure of the apparatus.

Combined Figs. 1 (l) and 2: Improvement In Tape Measures, prevent the recoil of the mainspring, and hold the My improvement consists U.S. Patent No. 79,965, Alvin J. Fellow, July 14, 1868. tape at any desired position, in the manner of fitting the and let it back at pleasure. Having made and arranged the spring-click which detains the main or primary spring to parts as before described, I wind on the tape, B, as repthe central part of the main-spring barrel, so as to hold resented at B', Fig. 2, put on the plate b' c with the clickthe tape at any desired position. I make the case, A, Fig. spring d and d', and the arm e, with its knob f, when the 1, and A A, Fig. 2, of gum-lac and saw-dust, or any other whole will appear as represented in Fig. 2; I then screw analogous substances, and color it with ivory-black, or the movable cap or side of the case on to the arbor h, any other suitable matter, to suit the taste or market. when the whole will appear represented in Fig. 1.

I fit the spiral or helical springs, to wind up the tape... as indicated in several sections at a a, & c., by securing it Revenue Volatility

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 38

JANUARY 2018 | 45

FEATURE

& Spring Manufacturing in 2017