Automotive Tooling Stays Strong, But Skilled Labor Remains an Issue

The Original Equipment Suppliers Association (OESA; Southfield, MI) and Harbour Results, Inc. (HRI; Southfield, MI) recently released the results of their Q3 2017 Automotive Tooling Barometer. The survey results show that the tooling industry experienced a strong third quarter, with die shops in particular experiencing a spike in capacity utilization (88 percent) and mold shops reaching 81 percent capacity. Shops with revenue ranges of $10 million to $20 million are experiencing peak capacity utilization rates of 87 percent. “Even though mold shops are slightly less utilized than die shops, average profitability numbers across the industry are still very close,” said Laurie Harbour, the president and chief executive officer of HRI. “That being said, the top performing tool shops average eight points more profit compared to the averages.”

The OESA Automotive Tooling Barometer survey series was created by the OESA Tooling Council with the partnership of Harbour Results to provide an indicator of the current state of the automotive tooling industry, and the perception of the near-term prospects for the industry. The survey captures the sentiment of the major companies in this market. A full copy of the May OESA Automotive Tooling Barometer results is available here.

The cyclical nature of work-on-hold continues, as it falls to 8.6 percent, the lowest it has been since this study started in 2014. Despite record low work-on-hold numbers, overall sentiment (a tool shop’s general outlook for the next three months) dropped two percentage points, but still remains in the overwhelmingly positive range. The slight decrease in sentiment is likely due to the continued hurdles the tooling industry is facing. Overall, skilled labor (38 percent) stands out as the foremost issue in the industry, followed by on-time delivery (18 percent) and profitability (14 percent). These key issues vary considerably depending on factors such as a shop’s profitability, type and geography.

“The shortage of skilled labor is a major concern for both U.S. and Canadian shops in multiple processes – mold, die and plastic molding,” noted Julie A. Fream, the president and chief executive officer of OESA. “In order to combat this issue, it’s necessary that these companies implement a talent acquisition program to educate, attract and hire young people with the aptitude to work in the tool and die industry.” The survey population was comprised of mold shops (77 percent) and die shops (23 percent), both in the U.S. (70 percent) and Canada (30 percent). Shops with revenue ranges less than $5 million up to greater than $40 million were represented, with the largest percentage of shops coming from the $10 million to $20 million (30 percent) range.

harbourresults.com