Ray MacNeil is the principal at Ray MacNeil Composites Consulting in Wexford, Pa. He has over 39 years of experience working in the composites industry and previously worked for PPG Industries’ Fiber Glass Division. MacNeil provides market research and business development for a variety of companies within the composites industry using his extensive background in sales and marketing, strategic planning and business analysis.
What indicators do you use to forecast the industry outlook?
There are several worthwhile indicators to consider in assessing the future performance of an industry as complex as ours. You want to look at numbers from the last few quarters as well as any available forecasts for gross domestic product (GDP), industrial production, housing starts, automotive builds, capital spending and consumer confidence. One of my favorite indicators of the short term manufacturing outlook is the Purchasing Managers’ Index of Manufacturing as reported by the Institute for Supply Management. The December 2011 reading was 53.7 percent, up 1.2 percentage points from November and the 29th consecutive month of positive growth. Any reading above 50 percent indicates the manufacturing economy is growing and any score above 42.5 percent indicates an expansion of the overall economy gross domestic product.
What is the largest market for composite components?
Wind energy has been the hands-down superstar of the U.S. and global composites industries during the last decade even though automotive and construction are still larger in volume. In the U.S., cumulative wind capacity has had a 10-year compound average growth rate of 27 percent and a rate of 33 percent during the last five years even though the wind industry experienced sharp downturns in 2002, 2004 and 2010.
What do you think are the largest industry threats?
With regards to wind energy, I would say the likely expiration of the production tax credit at the end of 2012 and the appearance of new international competitors from China are the most worrisome threats. Even as U.S. wind installations were setting records in recent years and made the U.S. the global leader in annual installations in 2005 and cumulative capacity in 2008, China was building up an even greater head of steam. Four of the top 10 leading global suppliers of wind turbines now hail from China. This rapid growth in China is worth noting because while their wind industry suppliers have grown thanks to very strong domestic growth so far, a few of them are bidding already on projects in Texas. We’ll have to wait and see whether they are successful in affecting the dynamics of the U.S. wind market a few years down the road.