Page 17 - MetalForming March 2014

• The majority did not supply the automotive industry; more companies supplied the medical industry in the most profitable group than any other industry.
Another common question: “What’s the profitability for automotive suppliers versus non-automotive?” In 2013, the profitability of automotive companies averaged 4.4 percent, below the 5.3-percent industry average. Nonautomotive companies yielded an average profitability of 6.1 percent.
The survey also tracks the number of companies with neg- ative earnings. This metric has decreased steadily over the last several years. In 2010, close to 40 percent of survey partici- pants reported negative earnings. In 2013, that number dropped to 9 percent.
Forecast for 2014
An informal poll of PMA members who attended recent district meetings indicated that most expect 2014 to be another good year, with increased sales and steady prof- itability. However, there are concerns.
Best Practices
Companies Reporting Negative Earnings
50%
25%
0%
37%
15%
12%
9%
2010 2011 2012 2013
2013 EBIT as a Percentage of Sales—By Industry Served
7.00%
5.00%
3.00%
5.3%
Industry
4.4%
Automotive
6.1%
Nonautomotive
Chief among these concerns: the continuing lack of qual- ified employees, closely followed by capacity constraints. Many companies have maximized plant capacity and would need to expand to sustain significant growth. Expansion can be a difficult decision because it requires the contribu- tion of capital to the business. Owners may be reluctant to put more money into play—content to maintain the status quo, which hasn’t been a particularly bad strategy the last few years. We’ll have to wait and see how this plays out over the
coming year.
MF
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