OESA/HRI Automotive Tooling Barometer: Recovering from a Slow Start
The Original Equipment Suppliers Association (OESA) and Harbour Results, Inc. (HRI) recently completed their Automotive Tooling Barometer containing data from Q2 2016. While the industry experienced a slow start to the year with more than $2 billion in tooling capacity not leveraged during first quarter, it has since taken a turn in the right direction. Not only have capacity utilization rates stabilized for die (83 percent) and mold (76 percent) tool makers in the fourth quarter, overall work ‘on hold’ has decreased by six percentage points since January. HRI estimates the industry ‘on hold’ impact in second and third quarters to be around $1.6 billion, a decrease from over $2 billion in January.
Not only does the research show the industry recovering from a downturn, but also shops are expressing a positive outlook about their business in the coming months. Year over year, the tooling sentiment index has experienced a 32 percent change, with sentiment now up eight points since January to 74. HRI’s analysis of the survey results revealed the cyclical nature to sentiment, as there is some level of correlation to the amount of work ‘on hold’ reported.
“Automotive forecast data shows the industry can expect to see a significant increase in tooling during the next two years”, said Laurie Harbour, president and CEO of HRI. “Although the average price per tool is down, it is important that shops increase quoting to maintain revenue and meet demands.”
Additionally, the research assessed sales and marketing activities within the tooling industry and found that sales efficiency and quoting levels varied greatly by tool shop revenue. Larger shops demonstrated greater levels of efficiency, with shops over $20 million earning 22 percent more revenue per salesperson and quoting 32 percent more per estimator than shops under $20 million.
The Tooling Barometer collected insights from a diverse group of shops with a total of more than $1 billion in tooling revenue across nine different industries. Although 82 percent of responses come from automotive, HRI deems this to be a good reflection of the overall industry as the automotive industry accounts for a majority of the tooling industry’s revenue.
On Nov. 10, 2016, OESA and HRI are hosting the 2016 Automotive Tooling Update, a meeting where automotive tooling market intelligence and insights, as well as an in-depth analysis of current tooling practices and trends will be shared. For more information and to register for the event, please click here.
About the OESA/HRI Tooling Barometer
The OESA Automotive Tooling Barometer survey series was created by the OESA Tooling Council with the partnership of Harbour Results, Inc. 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 OESA Automotive Tooling Barometer captures the sentiment of the major companies in this market. A full copy of the September OESA Automotive Tooling Barometer results is available here.
About HRI, Inc.
Harbour Results, Inc. a leading business and operational consulting firm for the manufacturing industry offers operational and strategic advisory expertise, and proprietary assessment programs to help optimize a business’s performance. Focused on small- to medium-sized manufacturers, many of which are family-owned or privately held, HRI utilizes its knowledge, experience and relationships to build upon the established foundation with sound strategies and operational improvement. Headquartered in Southfield, Michigan, Harbour Results was founded in 2005 by industry analyst Laurie Harbour. Today, the Harbour Results team is comprised of manufacturing experts, and clients also have exclusive access to Harbour Results’ network of partner companies and worldwide resources.
OESA’s mission is to champion the business interests of automotive original equipment (OE) suppliers. Since 1998, the Association has been addressing issues of common concern and advocating on behalf of the supplier community throughout the supply chain and in Washington, D.C.
OESA is one of four divisions of the Motor & Equipment Manufacturers Association (MEMA). All divisions are represented by MEMA’s advocacy and emerging technology expertise. For additional information, visit http://www.oesa.org.