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‘Choppier' conditions for mold makers in 2023, but better than anticip…

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‘Choppier' conditions for mold makers in 2023, but better than anticipated



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File photo



Mold makers are feeling the squeeze as they stand firm against foreign competitors trying to beat them on price while the domestic competition heats up in terms of lead times.


So far, 2023 has been a bit bumpy but good overall for U.S. mold makers, according to participants of the Aug. 17 online Q3 Moldmaker Forum put on by the Plastics Industry Association.


"It has been a little choppier lately with some very good months and very bad months," said Toby Bral of MSI Mold Builders Inc. in Cedar Rapids, Iowa. "Overall, it has been pretty good, better than we anticipated coming into the year."


Perc Pineda, chief economist for the Washington-based trade association, had some good numbers to report during the quarterly meeting for plastics professionals who build, buy and run molds.


"Our trade deficit in molds has actually decreased by 7.2 percent to $744.8 million January to June this year compared to January to June of last year," Pineda said.


Exports of U.S.-made molds increased 26.4 percent month over month through June, Pineda said.


"That's very strong. Year over year, it increased by 1.8 percent," he said, adding that figure is through May.


The June data is due out the week of Aug. 21.


"It looks like we had an increase in exports and a decrease in imports," Pineda said. "What has been in the news lately is the slowdown in trade with the U.S. and China."


Mold imports from China decreased 13.6 percent in dollar value from January to June, Pineda said.


"In terms of quantities on imports of molds from China, it looks like it has dropped 50.1 percent year to date compared to year to date last year. That's a huge number," Pineda said.


Conversely, however, imports from Canada increased 15.2 percent in dollar value but were down substantially — by 69.3 percent — in terms of quantity.




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Plastics Industry Association Pineda




Market dependent


The successes and challenges of mold makers at any given time is largely dependent on the markets they serve, noted Glenn Starkey, president of Progressive Components, a Wauconda, Ill.-based company that sells components and monitoring systems for mold making and molding.


From his location in a medical and packaging corridor in northern Illinois, Starkey said he can sense a big difference in customer attitudes between Illinois and Michigan.


"I refer to it as a tale of two sides of Lake Michigan," Starkey said. "You're more likely to find mold builders [in Illinois] who report being steady to strong with medical packaging. And the other side of Lake Michigan, which is geared more toward automotive and appliances, you're more likely to hear that business is choppy or just slow. And sometimes it's scary for some shops. It's definitely market-based."


Starkey said he is already bracing himself for what the future will hold for the 2024 mold maker meeting.


"It's anticipated that things are releasing and breaking in the automotive world, but the question is what will Perc report 12 months from now?" Starkey asked. "How many of those molds were built in the U.S. vs. imported from far away?"


 


R&D update


The quarterly meeting also addressed government advocacy aimed at repealing a provision in President Donald Trump's 2017 tax cut plan that changed how companies deduct R&D expenses. The change turned a 100 percent deduction in the year money is spent into an amortized deduction spread over five years, which raised federal income taxes as much as 35 percent for some companies.


Bills to repeal the provision are pending in the U.S. House and Senate and picking up a lot of co-sponsors, according to Suzanne Morgan, senior director of government affairs at the Plastics Industry Association.


The trade group says support for R&D investments creates opportunities and jobs, especially for small businesses.


The owners of some small high-tech firms also have been using social media, particularly X, formerly Twitter, to push federal lawmakers to repeal the provision.


"We're seeing co-sponsors from a lot of the blue states — the Pacific Northwest, San Francisco area and New York — that we normally wouldn't have seen because of this sort of organic movement with small-business, high-tech guys," Morgan said.


Even so, the measures won't pass as stand-alone bills.


"You need a vehicle to put this on," Morgan said. "It may have to wait to the very end of the year when there's always a large tax bill. It may go on that."


After federal lawmakers return to session next month, Morgan expects their focus to be on the budget and funding the government.


"I think you can expect possibly a government shutdown. ... It's going to get ugly so there won't be interest in talking about any bipartisan issue," Morgan said.


The R&D amortization repeal could be paired with plans by Democrats to reinstate a $300-a-month child tax credit that was enacted during the coronavirus pandemic but has since expired.


"Once that comes out, a lot of Democrats will co-sponsor that bill. They kind of have been linked together for some reason," Morgan said.


She's crossing her fingers.


"People have been telling their members of Congress and senators just how devastating this was in the last tax year. It may have to get the fix this year," Morgan said.



* Source : https://www.plasticsnews.com/news/trade-deficit-drops-molds-imports-china-down

* Edit : HANDLER


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