September 5, 2013
The 2013 What Keeps You Up at Night? survey of The FABRICATOR readership reveals that fabricators are taking steps to ensure that recent growth is not a short-term occurrence, but a long-term trend.
It’s been more than four years since the end of the Great Recession, at least according to the National Bureau of Economic Research, the folks in charge of determining such things. With all that time to bring back workers, re-establish relationships with customers, invest in new capabilities, and attract new business, metal fabricators must be incredibly optimistic about the near future.
Despite two or three terrific sales years for many metal fabricators, they aren’t ready to talk about any future golden days. They are taking a conservative approach to their businesses, hoping for the best but preparing for the worst. In general, they don’t know what to expect.
The results of The FABRICATOR’s “What Keeps You up at Night?” survey reveals that very cautious optimism. Everyone recognizes that business is pretty good, but they have no idea how long that can continue. Many believe that any future prosperity is held hostage by the unknowns that might be lurking around the next corner. For many metal fabricators, it boils down to an ineffective federal government.
One metal fabricator didn’t mince words when asked what the biggest problem facing the metal fabricating industry is: “Government. They need to stay out of small business and let capitalism work. If we could be more in control of our own destiny and not have to worry about what regulation is coming next, then we could spend money on equipment, hire more workers, and grow our brand. Instead, we have to sit on money, worry about regulations, and waste time planning for ‘what if’ scenarios, like health care, minimum wage, taxes, etc. It’s ridiculous!”
Of course, that opinion was one of many. To give you a better idea of the general mood and outlook of the metal fabricating industry, we have decided to share some of the results of this year’s biannual survey, which was sent to more than 6,800 subscribers of The FABRICATOR and generated a response from slightly more than 1 percent of them. It’s not a scientific survey by any means, but it does provide valuable insight into today’s metal fabricating community.
Availability of skilled workers 36%
Availability of credit 10%
Growth of federal government debt 9%
Meeting increased customer expectations 9%
Availability of credit 19%
Availability of skilled workers 12%
Cost of raw materials 8%
Meeting increased customer expectations 5%
Availability of credit14%
Availability of skilled workers 6%
Meeting increased customer expectations 6%
(Editor’s Note: “Cost of raw material” was not provided as a choice in the 2009 survey.)
With this question, subscribers were asked to rank a series of concerns from 1 to 13 according to what was the most important issue that kept them up at night. More fabricators appear to be concerned about the availability of skilled workers as the economy has improved over the last several years, but the concerns about the economy have yet to subside. Also, although few survey respondents listed “cost of raw materials” as their main concern, 20 percent did cite it as their second major concern in this year’s survey.
Capital equipment acquisition 22%
Cost reduction 16%
Quality control 6%
R&D/Engineering and design 6%
Survey participants were asked to rank 11 areas of organizational improvement over the next several years according to importance, and they responded in such a way that suggested few companies are interested in adding labor right now. “Lead-times throughput” and “industry standards/codes” ranked high for a handful of FABRICATOR readers, but were deemed less important by a majority of respondents.
2013 Yes 15% No 85%
2011 Yes 13% No 87%
Not too much has changed from the 2011 to the 2013 survey.
2013 Yes 73% No 27%
2011 Yes 77% No 23%
2009 Yes 64% No 35%
In all likelihood, the support of metal fabricating as a career choice decreased when compared to the 2011 survey because of the uncertainty that surrounds the economic and regulatory environment in the U.S.
Finding new customers 39%
Capital equipment 37%
Process improvement (lean manufacturing, Six Sigma, etc.) 14%
Employee development 5%
When asked to rank several activities from 1 to 7 according to what they considered to be the most important area of resources deployment in the near future, metal fabricators focused on the bottom line: They need a diversified customer base to survive. Focus on areas such as green initiatives and information technology didn’t rank as important to a large majority of the survey respondents.
Less than $10 4%
Many experienced manufacturing workers and labor pundits believe the skilled-worker shortage is more of a cheap-skilled-worker shortage. In this survey, readers revealed that entry-level wages for welders run the gamut. Differences in the starting wages probably differ greatly according to industry and geographic location, but somebody looking for a start in a new industry has the chance to make a decent wage if they look for it.
Staying the same 42%
In a glass-half-empty world, these results have to be pretty encouraging for the rest of 2013. Right?
Reform the tax code 40%
Reduce regulations 18%
Support industrial tech programs 17%
Impose more import tariffs 14%
Negotiate more trade agreements 6%
Formulate national energy policy 5%
Survey participants were asked to rank these six actions according to importance. One respondent had a more targeted idea when asked for general comments, “Lean, Six Sigma, and theory of constraints applied to state and federal governments.”
Finding and retaining skilled labor 51%
Establishing/offering apprenticeships/internships 26%
Technology training for shop floor employees 13%
Sales training 8%
In ranking these areas of human resources/workforce development according to importance, readers focused heavily on getting new blood in their operations.
2013 Satisfied 63% Somewhat satisfied 31% Dissatisfied 6%
2011 Satisfied 63% Somewhat satisfied 29% Dissatisfied 8%
2009 Satisfied 57% Somewhat satisfied 26% Dissatisfied 17%
Metal fabricators may not be the profession to pursue in search of riches, but it appears to be a good choice for job satisfaction.
Oil & gas industry/OCTG 33%
Bus, heavy truck & trailer/RV 28%
Food processing & food service/Beverage 25%
Military equipment & munitions 24%
Of course, metal fabricators are targeting many more industries, but these scored the highest after survey respondents were asked to choose all that were applicable. Obviously, many companies are waiting for the structural steel market to climb back to the levels prior to the Great Recession. Also, even with the constant threat of further government cutbacks, many fabricators still see the defense industry as a possible place to expand.
The FABRICATOR® is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971. Print subscriptions are free to qualified persons in North America involved in metal forming and fabricating.