Automotive suppliers confidence dipped slightly in July
compared with May, according to the latest survey of members of
the Original Equipment Suppliers Association (OESA). The index
dropped to 60 from 62 two months earlier.
Some of those surveyed
indicated growth may be stymied by an inability to hire
qualified personnel fast enough to keep up with new orders and
new program launches.
priorities are purchasing capital equipment and hiring direct
hourly-salary and temporary-contract employees. Footprint
expansion is not considered a key action. As one survey
respondent noted: "We already have the footprint, now we need
Sixty-three percent of
OESA members surveyed plan to boost capital expenditures.
Fifty-eight percent of respondents would consider acquiring
companies over the next budget cycle, up from 42 percent a year
those suppliers to consider acquisitions include building
market share, accessing new customers or following customers
into geographic markets, and accelerating access to new
technologies, according to Dave Andrea, OESAs senior vice
president for industry analysis and economics.
Some respondents said
theyre seeking strategic opportunities across North
America, while others mentioned the southern United States and
Mexico. Some respondents looked to add value, while others
wanted to enhance their geographical reach to support global
vehicle build programs.
Others are more
focused on Asia, but still developing their strategies for the
region. Still others cited vertical integration as a goal.
As for the sentiment
index, companies that expressed optimism cited consistent order
rates, positive volume trends, an uptick in project quotation
activity and new order entries, noting that capacity "is at a
premium." Others said they had "growing confidence in the
One respondent warned,
however, that "We are still very conservative and now is not
the time to get too bullish anywhere but perhaps China and
The OESA July index of
60 compares with a low of 21 in November 2008 and a high of 73
in January 2010. Any number above 50 indicates a positive