Perhaps even harder hit by the economy than the secondary wood processors were the machinery manufacturers, whose sales fell significantly in 2009.
“Because of product mix or marketing foresight, some survived the tumult of last year in reasonably good shape. Others struggled to keep their corporate heads above water by retrenching, cutting overhead, and laying off employees,” says Ken Hutton, executive director of the Wood Machinery Manufacturers of America.
“For 2010, the government has declared the days of ‘The Great Recession’ are over. WMMA’s economic benchmarker, Alan Beaulieu of ITR, states that leading indicators reflect improvement in most areas of the U.S. economy. [But] until neighbors are employed again, most U.S. consumers will not have a strong urge to buy again, and certainly not at the levels seen during the over-inflated, hyper-active years of 2006 and 2007. So, at best, the next 12 months should show modest sales improvement with some modicum of profitability as long as expenses are kept in check,” he adds. “Be prepared for the ‘new normal’ of demand only at 60 to 70 percent of what it had been.”
Dave Rothwell, president of the Woodworking Machinery Industry Assn., says his members also are anticipating higher sales for 2010. “Most are optimistic that the bottom has been reached and expect an increase of 15-20 percent [over 2009 sales].”
Like the companies they serve, machinery manufacturers’ businesses also will be impacted by regulations, including those pertaining to combustible dust, ergonomics and safety, as well as credit availability for customers.
“Success in 2010 will be defined as a second year of survival,” Hutton comments. “In general, it will mean operating the business in a different context than ever done previously since there still will be too much supply chasing demand.”
Rothwell agrees. “[An] industry trying to do ‘business as usual’ needs to adjust to the new realities. Manufacturers need to update their production methods urgently in order to meet global competition.
“The U.S. woodworking industry also needs to be more open to global opportunities and more aware of global challenges they will be facing, such as mass customization, high quality, design innovation, etc.,” Rothwell adds.
Business growth, Hutton says, “means: capitalizing on export opportunities with the dollar exchange rate strongly in favor of U.S. producers and expanding into non-traditional market and product applications.
Have something to say? Share your thoughts with us in the comments below.