Specialty Silicone Products (SSP) recently attended Silicone Expo USA 2023, a tradeshow and conference for the entire silicone industry. For the second year in a row, the event was held in Detroit, Michigan, a clear acknowledgment of the importance of silicone rubber to the automotive industry. Silicone is vital for many other applications as well, and Silicone Expo offered important insights for members of the aerospace, defense, medical, transportation, and energy industries.
Through discussions at our tradeshow booth and throughout the event hall, SSP learned five valuable lessons that we’d like to share with you.
- There’s pressure to cut prices across the supply chain.
- Most companies claim that business is down after a record year.
- Silicone supplies are improving, but there’s cause for concern.
- Optimism about the economy is in short supply.
- In-person everything is back, and that’s good news for everyone.
#1 There’s pressure to cut prices across the supply chain.
Original equipment manufacturers (OEMs) that absorbed price increases during and after the pandemic are looking for ways to cut costs. Today, pressure to reduce prices spans the silicone supply chain and is affecting material manufacturers and gasket fabricators alike. To satisfy OEM demand, companies need to leverage their own supplier relationships without cutting corners on quality or compliance.
#2 Most companies claim that business is down after a record year.
For many reasons, 2022 meant record sales for the silicone industry. The end of the pandemic increased the availability of supplies, and high-growth industries ordered more materials and products. With the pain of COVID-related shortages still fresh, companies also bought more than they needed to secure their supplies. Because of this overbuying, businesses are drawing down their inventory and buying less in 2023.
#3 Silicone supplies are improving, but there’s cause for concern.
Although there’s enough silicone today, the state of the supply chain is raising concerns. Because China produces such a large share of raw materials, trade disputes and geopolitical tensions could disrupt the silicone supply – and at any time. That’s why industry leaders are working with domestic suppliers and even the U.S. government to ensure that the risks, especially to critical industries, are understood.
#4 Optimism about the economy is in short supply.
The U.S. economy is growing at a modest pace, but most of the companies that SSP spoke with at Silicone Expo weren’t feeling optimistic. They’re concerned about the possibility of an economic slowdown, even as economists disagree over the likelihood of a recession in 2024. Consumer spending might be helping things for now, but the silicone industry is facing challenges ranging from inflation to worker shortages.
#5 In-person everything is back, and that’s good news for everyone.
For the second year in a row, the entire silicone industry gathered in person for an event that wouldn’t have happened during the height of the pandemic. That’s good news for our industry, but it doesn’t end there. Many companies are making in-person sales calls again, and they’re also visiting clients to provide technical advice and support.
Contact SSP
SSP hopes that these lessons from Silicone Expo USA 2023 can help your own business during the remainder of this calendar year and beyond. If you’d like more information about what we learned, or if you attended the event and would like to share your own observations, we’d enjoy hearing from you. Contact us online or email Dominic Testo, SSP’s Business Development Manager.
