Products Finishing

SEP 2018

Products Finishing magazine is the No. 1 industrial finishing publication in the world. We keep our readers informed about the latest news and trends in plating, painting, powder coating, anodizing, electrocoating, parts cleaning, and pretreatment.

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CUSTOM COATERS Make a small investment for a big return. Join CCAI today! Opportunity to participate in a Peer Group Discounts on CCAI National & Chapter events, including FABTECH Capital Expenditure There are all manner of reasons for a bump in capital expenditures. Usually there is some outside moƟvaƟon that makes the Ɵming appropriate. This can be the addiƟon (or expiraƟon) of an incenƟve that propels companies to act right away. It can be the moves of a compeƟtor that forces everybody else to catch up. It can a tax cut or at least a change in how a machine depreciates. This year there has been a reacƟon to all of these to one degree or another. The big surge at the start of the year was promoted by the fact that tax breaks were going to expire and the latest bump appears to have been a reacƟon to the threats of tariffs and trade wars. Companies wanted to get their orders in before there was a price hike. The good news is that expenditures have been preƩy consistent over the last year and when there has been a deviaƟon from the norm it was an upward trend. May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May 7.7 9.8 7.9 7.8 8.7 8.4 7.5 12.8 6.9 7.7 9.1 7.9 7.7 CCAI's Executive Economic Summary New Automobile & Light Truck Sales Opening Index Analysis New Home Starts Steel Consumption Industrial Capacity Utilization Metal Pricing Purchasing Managers Index Capital Expenditure Durable Goods Shipments Appliance Activity Factory Orders Credit Movement (Credit Managers Index) Transportation Activity Industrial Capacity Utilization In general, the rate of capacity uƟlizaƟon has been tantalizing analysts as it creeps closer and closer to the level that would be considered normal (80% to 85%). It got as close as it has in years last month but has fallen back just a liƩle this month. One of the factors at work here may be the impact of the corporate tax cuts. This money has been spent in a variety of ways, but the small and mid-size companies have mostly been invesƟng in new capacity – both human and machine. There is a period aŌer a new machine is purchased when the output falls short of the investment – it takes Ɵme to get the maximum output (and that goes for new hires as well). There is a period in which capacity is not used efficiently, but as the machines are integrated, people are trained and new customers are brought on, the capacity is used efficiently again. That has been part of the reason for the slow advance towards normalcy. May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May 76.5 76.7 76.9 75.8 76.4 77.0 77.2 77.7 77.1 77.7 77.6 78.0 77.9 CCAI's Executive Economic Summary New Automobile & Light Truck Sales Opening Index Analysis New Home Starts Steel Consumption Industrial Capacity Utilization Metal Pricing Purchasing Managers Index Capital Expenditure Durable Goods Shipments Appliance Activity Factory Orders Credit Movement (Credit Managers Index) Transportation Activity Monthly Executive Economic Summaries Confidential Operating Ratio Benchmarking Survey Capabilities listings online and in print directories Learn more about the benefits of Custom Coater membership and join CCAI today at www.ccaiweb.com

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