Here in Toronto, as we enter the third quarter, the weather has turned dramatically colder. It feels like autumn. That may be the clearest signal facing us. The economy, global politics, the caster industry and even our own customers are all sending mixed signals. You are likely facing some of the same unpredictability. In the spirit of offering our customers and colleagues some insight, here’s what we see and what we’re doing about it.
Higher interest rates are continuing to have an impact. The cost of capital investments has become prohibitive to some and potentially destructive to others. In our own business, we had the foresight to delay some planned projects and the acquisition of equipment. We will be fine but some of our affiliated companies as well as some of our customers are in precarious positions. With the potential for even higher interest rates, the economy remains hard to read.
The labour market has become much tighter. It’s really hard to get well-qualified employees with specialized skill sets. We have decided that we’re not going to feel pressured and settle for second best. For example, it recently took us months and countless candidates to hire a superb electrician. Other businesses may not be in the position to wait for the right talent.
On the positive side, supply chains are strong. Prices of raw materials and other production inputs have steadied. That’s allowing us to effectively plan for 2024 by securing our supply chains and ensuring that our manufacturing capability remains dependable.
However, the price of oil is precarious. Current events in the Middle East have the potential to put dramatic upward pressure on the cost of oil. That, in turn, could have cascading effects on supply chains.
The move toward reshoring is growing. We continue to receive calls from customers who want to reduce or eliminate their offshore purchasing and replace it with North American-made materials. In fact, our orders from customers specifically switching to materials made in North America have increased significantly.
Many of our customers have ambitious plans for 2024 and that is fueling our research, design and engineering efforts. Our R&D initiatives are progressing very well. We expect to introduce a number of new casters in the coming year.
Despite the uncertainty, we recently introduced a new website and are committed to continuously enhancing our online presence through greater CAD functionality and more resources for our customers. Our online catalogues are continuously updated so that you can always get up-to-date product information. We are constantly seeking to improve the user experience on the website. Please share any feedback.
These mixed signals make it very hard to predict what will happen with the economy and the caster industry in the coming months and into 2024. But we are certain that if we continuously improve our integrated manufacturing facility in Toronto and maintain our commitment to outstanding design and engineering, we can’t go wrong. More importantly, we know that our success will be guaranteed by keeping our customers at the centre of everything we do.
What are the mixed signals you are seeing in your businesses? Take a moment and let me know. Who knows. Together, we might be able to make both our companies stronger.
On a more personal note, I want to thank all of you who have called or emailed with your kind messages about what is happening in Israel. With many relatives and friends in Israel, the current events weigh heavily on me and my family here. Your wishes and concerns are comforting.