There's a consensus in the manufacturing industry that the North American metals casting subsector is growing. This year, the sector is anticipated to exceed $37 billion in net worth. That growth is expected to continue well into the next decade, with all categories of metals predicted to grow by as much as 4 percent annually.
But there's something else growing right beneath our noses that’s just as, if not infinitely more, interesting: There's a void swelling in the U.S. metals casting market -- a void that's getting bigger and bigger. Fast.
During the Great Recession, the metals casting industry was one of the hardest hit in the manufacturing world. While some of the industries and markets that supported the casting sector took heavy losses (such as the construction and automotive verticals), others essentially crumbled (such as the U.S. housing market), leaving many North American casting companies looking for work from overseas sourcing professionals in Europe and Asia.
Around the same time, U.S.-based engineers and sourcing professionals flocked to overseas markets such as China and India, where low labor costs typically translated into even lower sourcing costs. For many, sourcing Chinese manufacturers made too much economic sense at the time – even with the already existing communications barriers and potential product quality issues often associated with sourcing in the APAC region.
Today, even as China slowly loses its clout as a destination for U.S. sourcing professionals, it doesn't mean American engineers and sourcing professionals are returning their business to North American shores. Despite movements meant to reshore casting manufacturing to the United States, buyers have instead moved their efforts to new areas of Europe and South America, seemingly bypassing U.S.-based casting suppliers on the majority.
So, yes, there's growth in the U.S. casting sector. But it could very well be in danger of not meeting it's predictions.
For the last several years, casting companies located in the United States have found their business is coming less and less from overseas sourcing professionals. For those companies, the overseas custom parts buyers that supported the subsector for the last decade have begun to abandon ship, looking to take their business elsewhere, namely Europe and South America.
Consequently, casting exports were down across the board in 2015. This came just as many casting manufacturers expanded their shops and added capacity to meet predicted overseas demand. Demand that didn't manifest.
During the same time, U.S.-based custom parts buyers sourcing overseas discovered that doing business in China and APAC isn't all that it seems. Not only are rising labor costs in countries like China and India causing once-low manufacturing costs to surge in those regions, but U.S.-based engineers and sourcing professionals are becoming savvier when it comes to how they build and implement their sourcing strategies. For many, part quality compliance and access to a competent workforce are top-of-mind issues that can no longer be ignored.
So, more and more buyers are finding that these things can be provided by North American casting companies, many of whom are still left with capacity they've had trouble filling.
That means there's a void in the metals casting market -- a void you could fill.
It’s widely known that American-based manufacturers are some of the most knowledgeable, reliable, and technologically adept manufacturers in the world. And those in the U.S. metals casting subsector are certainly no different. Many are quickly researching and implementing advanced manufacturing techniques and processes to increase their appeal to sourcing professionals and decrease the overall price of their manufacturing services.
Because of the lack of work from overseas buyers and the general cost-aversion of many U.S. sourcing professionals, many casting companies are lowering their pricing across the board to be more economically competitive with their overseas competitors. This has created an immense opportunity for U.S.-based sourcing professionals.
Not only can those sourcing professionals fill the void left by European and APAC custom parts buyers, but they can do so at a price cheaper (on average) than that of just several years ago. What's more, those American buyers will also have access to better quality parts and easier lines of communication, making the sourcing process much more streamlined.
At the end of the day, it's a win/win for all parties involved. American sourcing professionals get the quality they desire at a lower than average price, while North American casting manufacturers fill their open capacity with high-value business from U.S. sourcing professionals.
Sure, there's a void growing in the North American casting market. But you can be the one to fill it.