Nonmetallic Mineral Products, NEC

SIC 3299

Industry report:

This category is composed of firms that manufacture goods made from plaster of Paris, papier-mache, sand lime, and other miscellaneous nonmetallic mineral products. Examples of industry output include synthetic stones, clay and plaster plaques, architectural plaster work, plaster of Paris sculptures, miniature gypsum images, plaster of Paris flower boxes, and gypsum urns.

Markets for miscellaneous nonmetallic mineral products are extremely fragmented. The largest single industry product category is statuary and art goods, which accounts for nearly 20 percent of industry output. The largest consumer of this industry's offerings is the nonferrous wire-drawing industry, which uses tubing made from quartz to produce electrical wire. Other major consumers include fabricated rubber product manufacturers and motor and generator makers, who also use quartz tubing. About 10 percent of production is exported.

The industry is relatively low-tech and manufactures many commodity-like products. The average amount of value contributed per production worker is about 65 percent lower than the U.S. manufacturing average. Likewise, capital investment per employee represents roughly 70 percent of the national manufacturing average. As a result, many producers of nonmetallic mineral products are highly vulnerable to competition from low-cost foreign producers.

U.S. sales of miscellaneous nonmetallic mineral products topped $400 million in the early 1980s. During the mid-1980s, however, shipment growth slowed compared to the 1960s and 1970s. Although domestic demand for products like electrical wiring and art supplies increased, foreign competition reduced profit opportunities in many sectors. Revenues increased at a moderate 5 percent annually between 1982 and 1990, slightly lagging behind inflation. A U.S. recession in the late 1980s and early 1990s further stalled expansion, and annual sales hovered around $650 to $700 million. General economic improvement in the mid-1990s, as well as a boost in new commercial and residential construction, led to increased demand for electrical wire, which helped the industry resume average growth to more than $1.6 billion in shipments in 1997. Prices rose again the following year. The value of shipments fluctuated throughout the late 1990s, then grew steadily from$1.8 billion in 2002 to $2.8 billion in 2005.

U.S. construction activity, a demand driver for the nonmetallic mineral industry, slowed dramatically at the end of the first decade of the 2000s. Overall construction fell nearly 11 percent in April 2009 compared to the same period in 2008, which caused demand for sand and gravel for construction projects also to decline. Building permits plummeted more than 50 percent. Until the economy improves and stabilizes, the industry can expect more of the same.

The industry slowed, along with the economy, at the end of the first decade of the 2000s. However, by 2010, the economy appeared to be starting to recover and the industry showed signs of improvement. That year, 1,581 U.S. firms manufactured goods made from plaster of Paris, papier-mache, sand lime, and other miscellaneous nonmetallic mineral products, according to Dun & Bradstreet. Together these firms generated $964.7 million in sales and employed 8,457 people. Manufacturers in this industry were concentrated in Florida, California, and New York, which accounted for more than 40 percent of the market share. Architectural sculptures and stucco were the largest segments, and combined to account for 68 percent of all businesses, although ceramic fiber generated the highest revenues, at $2.1 million for 2010.

Industry leaders in the early 2010s included CeramTec North America Corp., a division of CeramTec GmbH, based in Germany. The industry leader was formerly Carborundum Company of Niagara Falls, New York. Its parent company, Standard Oil Company of Ohio, ceased Carborundum's operations. "The reasoning behind the decision was that the bonded abrasives business had suffered under the depressed U.S. economy, similar to the automotive company, one of the main purchasers of abrasives," according to an article by Jessica Wasmund in the Niagara Gazette on July 24, 2006. The company went from sales that exceeded $242 million to closing the doors to its factories and mass layoffs.

Carborundum was not the only nonmetallic mineral product manufacturer to experience trouble at the end of the first decade of the 2000s. According to the Bureau of Labor Statistics (BLS), extended mass layoffs in this industry peaked at 205 in 2009 before dropping to 113 in 2010. Nevertheless, those two years, in addition to 2003, when the figure was 105, represented one-third of the decade during which layoff events numbered in the triple digits.

In the late twentieth century, significant development occurred in the area of advanced materials such as ceramic fibers. Ceramic fibers are used primarily in composite materials, which are lighter, stronger, and more heat-resistant than pure ceramics or metals. In 1997 the market introduced "core-sheath" ceramic fibers, which were the result of a new process called biocomponent extrusion that increased strength, heat resistance, and efficiency in production. The new fibers provided advantages to end users like auto and aircraft industries that used composite materials in high-tech applications, such as jet engines. Companies continued to develop new core-sheath fibers in the early twenty-first century.

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