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Economic Forecast 24 MoldMaking Technology January 2015 10 times the average amount mold- makers spent annually from 2008 to 2012 on these equipment types. Spending on vertical machining centers is expected to total a little more than $250 million, or more than 50 percent of all machine tool spend- ing. Within the VMC category, about 67 percent of the spending will be on machines with a Y axis of more than 20 inches while the remaining dollars will be spent on smaller machines. Spending on EDM equipment should nearly double in 2015 com- pared to 2014 to close to $70 million. About 55 percent of that spending will be on ram-type EDMs, and about 40 percent will be on wire-type machines. Moldmakers expect to increase their spending on grinding equipment by about 24 percent to $81 million, concentrating on centerless, flat/surface and cylindrical/external grinders. Of the almost $1.3 billion expected to be spent on injection molding machines in 2015, more than 60 percent will come from custom processors, the electronics/computers/telecom- munications industry and metalcutting job shops. Custom processors alone will account for nearly half of this spending. Based on demographic data collected by Gardner Business Media, 69 percent of custom processors make parts for the automotive industry, 57 percent for the medical/pharmaceuti- cal industry, 41 percent for the electronics/computers/telecom- munications industry and 39 percent for the aerospace/avia- tion industry. Electronics/computers/telecommunications and metalcutting job shops should spend about $120 million each on injection molding machines. The vast majority of injection molding machines purchased are horizontal. However, the market for vertical machines is expected to grow in 2015 and account for more than 20 percent of all injection molding machines, compared to just 12 percent in 2014. While hybrid machines were the fastest growing part of the market last year, spending on strictly electric or hydraulic injection molding machines should increase in 2015. Spending on complete molds is expected to rise more than 20 percent in 2015 to $1.262 billion. This is after a nearly 100-percent increase in such spending in 2014. Hot runner molds will account for about 75 percent of the spending on Capacity Utilization Leads Capital Equipment Consumption CHART 3 complete molds, while cold runner molds will make up the remaining 25 percent. Spending on both types of molds has grown significantly since 2013. What Does It All Mean? If the survey proves accurate, it would show that American manufacturing has made a dramatic recovery from the two recessions it has experienced this century. In fact, one could argue that this level of investment is necessary to support the current level of durable goods production, which is the highest it's ever been in the history of the country. This level of investment also indicates the importance of American manufacturing to the U.S. economy. More and more observers outside the world of manufacturing are paying attention and making the connection between manufacturing productivity and economic prosperity. Also, increased investment in capital equipment will result in job growth (see Charts 4 and 5). Throughout the 1960s and 1970s, as spending on machine tools increased, so did jobs in durable goods manufacturing. (This applies to spending on other types of capital equipment as well.) Beginning in 1980, as machine tool consumption fell to lower levels, jobs in durable goods manufacturing also declined. Since 2010, as machine tool consumption has increased, durable goods manufacturing jobs have also been increasing. Increased investment in capital equipment leads to higher productivity, which leads to greater profits, which leads to more jobs. The results of the survey also have short-term impact. First, longer delivery times should be expected as this year progresses. Manufacturing facilities spend more on capital equipment as their capacity utilization increases. Capacity utilization tends to lead capital equipment consumption by 10 months.