Machine tool accessories prices rising

Of the 19 industries tracked here as manufacturers of equipment and tools used in factories, average prices went up in 11 industries, fell in 4, and were flat in 4 others.

03/01/2001


Of the 19 industries tracked here as manufacturers of equipment and tools used in factories, average prices went up in 11 industries, fell in 4, and were flat in 4 others. Despite the fact that most manufacturers (17 of 19) are enjoying stability in their direct manufacturing costs, producers of tools and equipment remain under pressure to hike prices.

Trying to figure out exactly which tools or equipment may cause plant engineers the biggest pricing headaches means we must delve down into an analysis of the products that each industry makes. Let's look at the machine tool accessories (SIC 3545) industry. Here, average industry prices rose 0.98% in the 12-mo period ending December 2000. When we look at the prices paid for the average machine tool accessory in December 2000 compared to December 1999, average industry prices actually rose 1.3%.

The problem in the machine tool accessories industry, as with many others, is that materials costs have taken a big turn upward. Consider this: in 2000, imported materials costs jumped 6.5% while domestic materials costs also rose 1.4%.

Price/cost/demand roundup

IndustrySICAverage Product Prices 1 Change, % During 12-Mo Ending...Sep 00Average Product Prices 1 Change, % During 12-Mo Ending...Dec 00Direct Mfg. Costs 2 and Margins Grade Costs are...GradeGrowth in U.S. End Markets 3 Change, % During 12-Mo Ending...Sep 00Growth in U.S. End Markets 3 Change, % During 12-Mo Ending... Dec 00

Other hand and edge tools

3423

1.05

1.04

Stable

C

6.70

6.11

Hand saws and saw blades

3425

0.24

0.41

Rising

C

4.97

4.15

Other hardware

3429

2.18

1.96

Stable

B

5.02

3.62

Other power transmission equipment

3568

1.23

1.07

Stable

A

6.41

5.73

Conveyors and conveying equipment

3535

1.16

1.13

Stable

A

5.64

7.39

Hoists, cranes, and monorails

3536

1.59

1.75

Stable

A

6.13

6.42

Industrial trucks and tractors

3537

0.76

1.20

Stable

C

7.27

8.90

Metal-cutting machine tools

3541

0.70

0.78

Stable

D

15.29

16.94

Machine tool accessories

3545

0.74

0.98

Stable

F

10.74

10.89

Power-driven hand tools

3546

0.20

0.22

Stable

D

4.30

3.62

Welding apparatus

3548

1.74

1.96

Rising

C

3.58

2.33

Pumps and pumping equipment

3561

1.63

1.63

Stable

A

4.49

3.98

Air and gas compressors

3563

1.20

1.20

Stable

C

4.49

3.98

Speed changers, drives, and gears

3566

2.03

2.11

Stable

B

6.41

5.73

Transformers

3612

2.86

2.32

Stable

C

31.72

33.14

Motors and generators

3621

0.04

0.24

Stable

F

23.77

23.16

Process control instruments

3823

1.04

1.10

Stable

C

0.39

-0.66

Fluid meters and counting devices

3824

1.65

2.64

Stable

C

0.39

-0.66

Instruments to measure electricity

3825

1.42

1.48

Stable

F-

49.52

52.61


1 Average product price changes are calculated from the producer price index for each 4-digit SIC (standard industrial classification) 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 (telephone: 360-452-6159; e-mail: ebaatz@ice-alert.com).





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