Respondents to the annual Cabinet Makers Association benchmark survey say they are embracing CNC technology, are manufacturing an increasingly diverse array of products, and they reported improved earnings for 2014.
Study results show small-to-medium-size shops are adopting CNC manufacturing technology to the point where well over half of respondents (55 percent) said they currently have computer controlled equipment in their shops, with plans to add more in the future. More than 92 percent in the survey said their company uses computer design software to design their projects.
Another significant result showed that more than 64 percent of those answering the survey said they had a better 2014, income-wise, compared to 2013. In that same survey category, 22 percent said 2014 was about the same, while the rest acknowledged that 2014 was a down year compared to the previous 12 months. The largest percentage of increase (27 percent) was in the 5-10 percent ranged of improvement.
The 105-question survey, conducted earlier this year, shows cabinet makers are producing more than just residential cabinets, with the addition a more diverse product offering. The electronic survey, written by the CMA and administered by SurveyMonkey, was sent to a range of woodworkers, but with the majority (95 percent) of the respondents describing themselves as producers of cabinets, primarily residential kitchens and bathrooms.
Only 30 percent of those responding to the survey were CMA members. Still, by far, the CMA was the leading choice for trade group membership – 42 percent – of those who responded.
More than 22 percent of survey participants did business in the Upper Midwest, with 15 percent hailing from the Southeast United States and nearly 17 percent from the West. The rest were scattered in the Northeast, Southwest, Plains States, South Central and other regions. Slightly more than 1 percent had home addresses listed in Canada. The average market area radius of respondents ranged from less than 25 miles (10 percent) to 25-50 miles (26 percent) to 50-100 miles (36 percent). About 18 percent said they did business within a 100 to 500 mile radius.
The respondents’ answers, particularly those related to income and compensation, are held in strict confidence by SurveyMonkey and the CMA. No company names will be released nor will other confidential information, according to the CMA. Some of the questions were written for the CMA’s own internal use only.
Small residential shops
Most respondents had fewer than 10 employees. Nearly 70 percent said they were an owner, company officer or in senior management.
Primary customers of the respondents were homeowners (63 percent), followed by homebuilders (47 percent) and then general contractors (35 percent). So, it was obvious from the results that manufacturers sold to multiple customer sectors. More than 70 percent of those answering the survey said they also installed the products they manufactured.
“I’m extremely pleased with the response we received from the survey,” said CMA Executive Director Jim McDermott. “And the results provided some real insight into where our industry is and where it’s going. The results should be very helpful to manufacturers, suppliers and others in tune with the entire woodworking industry.”
Good outlook for 2015
One positive result of the survey had respondents saying by a rate of more than 85 percent that they expected 2015 to be a better year than 2014. The main reason for this optimism was that they had more future bookings of jobs with more work in the pipeline.
Some 70 percent of respondents said increased booked business was their main reason to feel upbeat about the future. The second reason for optimism was that they were getting more leads for jobs. The third reason given for that upbeat attitude was the fact that they were going to be involved with bigger jobs compared to the previous year.
Reasons given for not feeling optimistic related to fewer leads, tighter margins and smaller projects scheduled out.
CNC use on the rise
Sixty-one percent of CNC users said they have already upgraded what they had in terms of computer-based design and manufacturing technology or are expecting to do so or are in the process of upgrading. And more than 71 percent said that CNC added “significant manufacturing capacity” to their operations.
Relative to the financial impact CNC has had, 80 percent said that “considering the time and money necessary to become proficient, we are much more profitable” or “a little more profitable.” Less than 1 percent said adding CNC was a mistake.
Shop rates, multitasking
The survey gives a picture of current shop rates in these shops. The largest segment, 33 percent, said their shop rate was $65 to $99 per hour. Only 20 percent said their rate was less than $50 per hour. For 22 percent the rate was $50-$64. About 1.5 percent said their rate was more than $200.
Multi-tasking in the small to medium size shops seemed to be the norm rather than the exception. For example, nearly one third of the responding companies had between four and seven employees, with 14 percent having eight to 12 on the payroll. Most of those employees (70 percent) were shop laborers, while the next largest job category was designer. The obvious deduction is that a large number of hands-on workers were also involved in the design process. And, more than 43 percent of company employees were also described as estimators.
Sales and wages
In terms of who in the shop is paid more, the survey showed that the top wage earners were sales managers with more than 10 years experience, followed by general managers with 10-plus years of experience. Then came designers and estimators, followed by foremen with 10 years or more on the job. Designers with the same amount of work experience were compensated more relative the others in the shop and office.
The wage rate for these top wage earners ranged from $18-$25 per hour, $25-$40 and $41 per hour-plus for the top earners. (The complete results of the wage/job title results are available to those responding to the survey and those who purchase the complete results from the CMA.) As for the owners, in terms of monthly salary, the top range (31.69 percent), revealed by owners was between $4,000 and $6,000. Twenty four percent said their salary was between $2,500 and $4,000 per month. Forty-five percent said they provide health insurance benefits for the owners; 40 percent said they provide health insurance benefits for company employees.
The annual sales volume of those answering the survey ranged from less than $250,000 (16 percent) to over the $10 million (1.68 percent). The largest percentage of annual sales (22.35 percent) was the $250,000 to $499,000 range.
Other highlights of the survey results showed:
• Nearly 90 percent said they produce components for a variety of industry sectors;
• Thirty eight percent worked out of manufacturing facilities of between 5,000 to 15,000 square feet;
• Nearly 48 percent have been in business more than 20 years, and nearly 64 percent had more than 20 years experience in the wood industry;
• Nearly 52 percent sold to both residential and commercial customers, and about that same percentage had institutional and government clients;
• More than 88 percent said they use computer software in the operations, sales or accounting side of their business.
About the CMA
The Cabinet Makers Association is a professional organization in which cabinetmakers and woodworkers from both the residential and commercial markets get together and share their hard earned knowledge and experience to help one another. Members hail from the United States and Canada and produce cabinets and related wood-based products.
The CMA has a significant presence at all major trade shows and sponsors seminars for association members and others throughout the year.
The CMA’s mission statement says: “We do not believe we are competition. We believe that working together is the best way to improve our own individual companies as well as the industry as a whole. Take a look around and join in the experience.”
Full survey results available
Survey respondents will receive the results of the survey except for a few answers that will be used for CMA internal use only. Others can purchase a copy of the results for $39.95, payable to the CMA. For more information and to purchase the survey results, contact CMA Executive Director Jim McDermott at [email protected].
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