January 15, 2008
Metal fabricators and formers are expected to spend more than $2.2 billion on capital equipment in 2008. The 2008 FMAC Capital Spending Survey provides more details.
while some metal fabricators and formers may be caught up in the sluggish supply chains connected to the u.s. auto manufacturers or affected by the residential housing market, others are doing their best to keep up with orders. aerospace, defense, and power generation are just some of the industries that are making the idea of an economic slowdown this year a passing thought.
fabricators are planning for a good year and intend to spend accordingly. that's what the 2008 capital spending report from fma communications inc. suggests.
figure 1reveals that more than 80 percent of those surveyed plan to increase spending on capital equipment in 2008 or at least keep spending at the same level as they did in 2007. even among the small shops with one to 49 employees, only 10.9 percent said they plan to decrease spending.
fabricators apparently need to expand capacity to keep up with business. in 2007, survey respondents indicated that their companies were operating at 78.8 percent capacity; in 2008, that number came back at 80.5 percent. in 2007, 59.3 percent of respondents said they needed to increase capacity; in 2008, 61.8 percent noted a need for extra capacity.
fabricators surveyed said that close to 70 percent of their budgets would be dedicated to purchasing new equipment rather than used or rebuilt equipment. that number was much larger for bigger companies, with those that have more than 1,000 employees intending to spend 78 percent of their budget on new technology. fabricating companies with one to 49 employees were more apt to purchase used equipment, with 31.3 percent saying just that.
as a whole, approximately $2.2 billion is projected to be spent on metal fabricating and forming equipment in the u.s. in 2008.
the one most affordable tool for any fabricator is a welding power source, so it comes as no surprise that welding-related tools represent the largest technology area for projected capital spending. fabricators are projected to spend $263 million on welding power sources and another $220 million on related consumables and supplies. throw in another $141 million for related welding components, such as fixtures, positioners, robots, and safety equipment, and it's easy to see that welders are looking to invest in their businesses.
Press brakes, both hydraulic and mechanical, represent the single largest equipment area in terms of project spending—coming in at $198.4 million. Stamping presses, comprising hydraulic, mechanical, and servo, are another technology area of interest with projected spending in the realm of $166.3 million. Of all the cutting technologies, laser cutting remains the leader, attracting $136 million in projected spending. Figure 2provides a more complete picture of expenditures by equipment type.
The folks in Fabricated Metal Product Manufacturing, identified as North American Industry Classification System (NAICS) code 332, are projected to spend slightly more than $694 million in 2008 on metal fabricating technology. Machinery Manufacturing, NAICS code 333, is projected to spend $578 million, and Transportation Equipment Manufacturing, NAICS code 336, $323 million.
Of some interest is Metal Service Centers, NAICS code 423510. It's not normally thought of as a metal fabricating industry segment, but more metal distributors are getting into fabricating activities. That explains the $27.5 million planned to be spent on metal fabricating technology in 2008.
Figure 3provides further details on projected spending by other industry segments.
If capital spending plans are broken down geographically, the Midwest remains the hotbed of investment dollars. The West North Central (11.1 percent) and East North Central (32.4 percent) states are home to more than 40 percent of plants with plans to purchase metal fabricating technology in 2008. Figure 4shows the breakdown across the U.S.
Of plants planning to purchase capital equipment this year, 58.9 percent reside in 10 states:
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.