New Equipment Market Remains Lean

Suppliers see some improvement, but agree that manufacturers are cautious

Window and door manufacturers have not been buying a lot of new equipment lately. Suppliers aren’t predicting any dramatic upturn soon, but they do predict some movement as window and door sales begin to increase slowly.

“We believe the market has been getting stable,” says Sanjay Parikh, general manager for Joseph Machine Co. “There is still definitely more supply than demand, but there is reasonable activity going on related with new equipment purchases.”

“The general state of the market is still down,” reports Mike Biffl, national sales manager for St├╝rtz Machinery Inc. “The manufacturers that have budgeted for equipment in 2011 are generally the same companies that have continued investing throughout the downturn.“

One damper on new equipment sales continues to be the availability of so many used machines from plants that have been shut down. “We are finding that companies are going to the auctions to pick up the equipment that they are looking for and then ship it to us to be modified to fit their application,” reports Jim Tibesbar, sales manager for Erdman Automation Corp. There does continue to be some new equipment purchases for new products, however, as well as requests to retrofit and retool existing equipment, he adds.

Biffl sees much of the same activity, but also notes an uptick in discussions about capital investments. Manufacturers are waiting to see how the “season” starts off before making any move, he cautions, but “if things do improve in the next few months we will likely see a big push for installation of new equipment in the first quarter of 2012.”

Traditional Drivers
Tibesar sees manufacturer customers looking for efficiency and quality improvements and to bring some of the processes that were done by others back in-house. Traditional drivers—such as the need to decrease labor costs, improve production efficiency and/or enhance quality—“are always going to be there as sound business practices, maybe now more than ever,” he adds.

One of the major drivers in investment right now seems to be replacing of worn out equipment, Biffl reports. “People have reduced or eliminated capital expenditures in a lot of cases over the past few years. Now, equipment that was reaching the end of its useful life two years ago is becoming a priority to replace.”

Window manufacturers remain cautious when it comes to investments related to new window lines, Biffl contiues. “Most of the companies we are seeing adding product lines are doing so with minimal investment in tooling and rework on existing equipment.”

Changing Demands
Most suppliers agree that companies that are investing in new equipment are very cautious in making new investments. Tibesbar points to flexibility in equipment as a key factor in demand. Companies appreciate modular machines that give them the ability to reformat lines to meet current needs, as well as the option to change later on. “Production lines can be designed for the future and purchased in stages as business and finances allow.”

“We do not believe that ‘one size fits all,’" Parikh notes. Companies have unique needs and need to be served on a case-by-case basis. “We have been successful in delivering custom solutions at pretty much standard pricing.”

Given the market’s current state, Parikh believes it is up to the suppliers themselves to convince more manufacturers to invest in new equipment. “We have to be more competitive in the current market and make sure our customer understands the true value of the product and how it can help their business,” he states.

Biffl suggests it is going to take an overall improvement in the window and door market to boost investment in new equipment. "Most of our customers have seen spikes in their business, just as we have. What the manufacturers are looking for is some steady and maintained improvement in their business levels," he says. "Until confidence in the economy improves and the market shows a reasonably consistent upturn," he says, "we expect things to remain somewhat lean."