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Riordan Manufacturing Economic Factors

Essay by   •  December 27, 2010  •  Essay  •  1,092 Words (5 Pages)  •  1,344 Views

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Riordan manufacturing is one of the top competitors in its market in the field of plastic injection moldings. Riordan produces products to include plastic bottles, fans of all sizes, heart valves, medical stents and custom plastic parts. Riordans customers and markets include; automotive parts manufacturers, aircraft manufacturers, beverage makers and bottlers, appliance manufacturers, healthcare and the Department of Defense. The broader the base of a company's customers and markets, the more economic factors will affect a company's success rate.

The plastic bottles markets are impacted by the changes in demand for the bottler's product. The economist state that the plastic bottles used for serving beverages would only be minimally affected by the economy overall strength.

The economic factors for the automotive parts and the appliance manufactures would not only be the economic forecast but also the housing industry, the mortgage brokers and the interest rates. In the article found on the Seiders Report states the writings state the following about the overall housing market.

Home sales still appear to be trending downward from the unsustainable levels recorded in 2005 and sales cancellations still are a major issue. However, forward-looking indicators suggest that stabilization of home buyer demand is likely to occur in the near future.... # http://www.nahb.org/generic.aspx?sectionID=138&genericContentID=26009

Mortgage rates are reporting in the article titled "Mortgage Finance Market Commentary Issue # 18: Median Home Prices Deteriorate Further", that purchase originations will decline about 9 percents from last years 1.39 trillion but with that,

"Mortgage rates and projected low mortgage rates through the rest of the year, refinance originations should drop off significantly from last year. However, as a significant share of loans with adjustable rates will face their first reset next year, we expect that a portion of these loans will be refinanced into either fixed-rate mortgages or into other adjustable-rate mortgages with an initially lower rate, providing some support for refinance activity. We expect refinance originations to decline by about 30 percent to $1.07 trillion. # http://www.mbaa.org/NewsandMedia/PressCenter/46435.htm-

The demand for heart valves, stents and healthcare services is affected by the demographic

trends and the healthcare availability. The surge of the baby boomers that is inclusive of about one fourth of the population one would assume the demand for these products would only increase. The President has allotted funds in the following areas found in the article titled"

Health and Compassion

* $74 billion over 10 years for health-insurance tax credits for low-income individuals and families that will ultimately help 15 million families purchase affordable health insurance.

* $4 billion in grants to States to establish health insurance purchasing pools, through which people who qualify for the tax credit and others can obtain coverage.

* $28.5 billion over 10 years for tax deductions for premiums for high deductible insurance, which will ultimately help six million Americans save for their health care costs in tax-free accounts.

* $19.2 billion over 10 years for tax rebates for small businesses that contribute to their employees' health savings accounts, encouraging more small employers to offer health benefits.

* $2.0 billion for Health Centers in medically underserved areas, a $304 million increase, fulfilling the President's commitment to create or expand 1,200 center sites by 2006 and begin the commitment to establish a health center in every high-poverty county that can support one. # http://www.whitehouse.gov/omb/budget/fy2006/overview.html

From what the president has established in his budget for 2006, it would appear that the manufacturing of heart valves and shints will continue to rise due to the increase in the spending allotment for healthcare for all individuals.

The manufacturing of aircraft parts will in turn be affected by the overall economy and are at present in the following economical situation found in the article "FAA Aerospace Forecast Fiscal Years 2006-2017",

The 2006 forecast for commercial aviation anticipates small gains, but in the longer run, the industry is expected to grow significantly. System capacity - the overall yardstick for how busy aviation is both domestically and internationally - will increase just 0.9 percent this year, as legacy carriers cut back on flights. Capacity in international markets will rise 5.9 percent.

Domestically, capacity is expected to shrink 0.7 percent, triggered by cutbacks made by legacy carriers in their fleets. This creates a ripple in regional carrier capacity, which gets feed from the legacy carriers. Regional carrier capacity had grown by as much as 20 percent per year since 2003. This year, the

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