New Report Takes a Close Look At Trailer Manufacturing Industry

HOW MUCH does an employee of a trailer manufacturer earn on average? How much does the industry spend on raw materials? What is the value of inventories at the beginning and end of the year?

The answers to these and other questions can be found in the newly published "Truck Trailer Manufacturing 1997." The report is part of the 1997 Economic Census, a project conducted every five years by the U S Bureau of Census.

So what does this 1997 snapshot of the trailer manufacturing industry look like? Here are some of the findings, based on what 388 truck trailer establishments told the Census Bureau: * Trailer manufacturers employed more than 30,000 people in 1997. Of that number, 84% were production workers. * Demand for production workers grew throughout the year. On March 15, 1997, the industry employed 24,801 in the plant. By November 15, that figure had grown by more than 8% as the industry geared up for what was to be an even bigger year in 1998. * Despite the presence of large companies, most trailer manufacturers are relatively small operations. Less than half (47%) of the companies in the industry have 20 employees on the payroll. Because of the large manufacturers in the industry, the average number of employees is substantially higher-79 per company. * The 388 reporting companies paid more than $1 billion in employee compensation in 1997. This included a payroll of $835.3 million and $240.3 million in fringe benefits. * The average employee for a trailer manufacturer earned $27,259 in 1997. Production workers averaged $22,529. * The 388 reporting companies bought more than $3.7 billion worth of materials to produce trailers in 1997. This means that the average trailer manufacturer spent $9.7 million in material costs, including just under $9 million in material and component parts, $54,675 in electricity, and $64,451 in contract work.

The report also itemizes a variety of other costs that trailer manufacturers incur, including building and equipment rental, computer software and data processing services, advertising, accounting and bookkeeping services, and even the cost of refuse and hazardous waste removal.

Trailer manufacturers had a productive year in 1997. According to the report, the industry produced trailers valued at $5.5 billion in 1997. Of that figure, the 15 trailer manufacturers in Indiana produced shipments valued at $1.3 billion-25% of the industry total.

The industry also built up inventory significantly in 1997. Manufacturers started the year with inventory valued at $673 million. By the end of the year, the value had increased to $973 million, a 45% jump.

The report can be downloaded from the U S Census Bureau Web site (www.census.gov) and can be purchased on compact discs. For information about obtaining written reports, contact the bureau's customer service department at (301) 457-4100.

The work that went into the production of the 1997 Economic Census, however, has delayed publication of the annual summary of trailer shipments. This Census Bureau report updates the preliminary estimates for each month during the previous year. The report normally is out in time to be included in the August Trailer/Body Builders. Look for it this year in our September issue.

The summary for 1998 should bring a little reality to the Census Bureau tally of trailer shipments. According to the Census Bureau analyst who recently assumed responsibility for the monthly reports of trailer shipments, the survey had been plagued by a lack of participation among trailer manufacturers, along with some faulty imputing methods on the part of the bureau. Because of an incomplete response, Census must impute values for the manufacturers that do not send in their monthly reports. This obviously affects the accuracy of the reports. And if the formula used for imputing is not reevaluated frequently, imputing errors can be magnified.

Throughout 1998, outstanding performances by a few companies were extrapolated for the industry as a whole. This caused preliminary monthly reports last year to be much higher than they should have been.

The result has been a survey that we pay to have conducted but cannot bring ourselves to believe. Business was great in '98. But few are convinced that the industry turned out more than 344,000 trailers last year-almost 25% more than any year in history.

Since the first of this year, the Bureau of Census has tightened up its estimates. With a little better participation from the industry and some tweaking in methodology from the Census Bureau, perhaps we can have a monthly snapshot of the industry that really is in focus.

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