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Laboratory Purchasing Trends 2015: Uptick Expected

While not rebounding to 2011 levels, the survey responses obtained from the 2015 North American Survey of Laboratory Purchasing Trends generally point to a bit more optimism, fueled by increased project work across several industry sectors.

 

Since 2008, the Society for Laboratory Automation and Screening (SLAS) and the Laboratory Products Association (LPA) have partnered to conduct an annual study that examines trends and changes in laboratory personnel and workload in addition to purchasing trends over nine categories:

• Chemicals, reagents, solvents
• Glassware, plasticware
• Consumables excluding chemicals
• Laboratory equipment <$2,500
• Laboratory equipment >$2,500
• Laboratory instruments <$5,000
• Laboratory instruments >$5,000
• Laboratory furniture
• Laboratory automation

With data gathered in December 2014 and reported February 2015 during SLAS2015 in Washington, D.C., Clark Mulligan, LPA president, confirms that members of both organizations are well positioned to measure their progress against others in their space through this key study.

"The Laboratory Products Association was founded in 1918 as the Scientific Apparatus Makers Association," Mulligan says. "Our members are manufacturers and distributors of laboratory products and services such as glass and plasticware, chemicals, equipment and supplies used in scientific research and applied science and life science worldwide."

K.C. Warawa, president of K.C. Associates, the marketing research firm contracted to conduct the study, mentions that while each year's data provides helpful information, benchmarking individual performance over time is most useful.

"Trending is the most powerful part about doing market research," Warawa explains. "Because if you can see that something is changing, you can react to it. If you do a standard survey, it's a snapshot in time. Yes, it's good to know that information but it doesn't tell you what your marketing plans or your business plans should be because it doesn't tell you where you've been or where you're going."

Laboratory Personnel and Workload

"Expected hiring of personnel is a good indicator of what is happening in the lab," Warawa states.

The SLAS/LPA study showed bleak years from 2008-2010 with 17%, 14% and 12% respectively for percentage of respondents expecting to increase their staff. With the exceptions of 2011 and 2012 when expected increases tallied 25% and 21% respectively, the number has remained in the mid- to high teens. In 2015, 15% of firms responding expect to increase their staff (the lowest since 2010), 27% would replace employees leaving, 54% plan no hiring and 5% expect no hiring and plan layoffs or early retirements.

This 2015 hiring plan varies greatly by type of organization. As illustrated in the graph above, 22% of independent/contract laboratories responding plan to increase their staffs as compared to 11% of colleges/universities and 10% of hospitals. Editor's note: The 2015 SLAS Leadership Forum at SLAS2015 focused on strategies to replace decreasing funding from the National Institutes of Health for colleges and universities.

Laboratory workloads have been increasing over the eight years SLAS and LPA have been gathering data, Warawa says. As shown above, the January 2015 data shows 55% of the respondents expect to increase workloads, 38% expect the same workloads as the prior year and 7% expect decreases. Reasons for expected increase in workloads include additional projects, tests or business and same staff being more productive and responsible.

Also, as in previous years, increased workloads do not necessarily mean similar increases in personnel. For 2015, just 38% of the respondents anticipating an increased workload expect to increase staff.

Spending Expectations

Organizations expect to increase spending in 2015 over 2014 on chemicals, reagents, solvents (+3%); laboratory equipment less than $2,500 (+2%); laboratory instruments less than $5,000 (+1%); laboratory furniture (+3%); and laboratory automation (+1%). Increased workloads and new business/projects are most often cited as the reasons for spending increases.

When looked at a bit differently – using a purchasing indicator – each product category in 2015 shows a positive difference over 2014.

Warawa describes the purchasing indicator. "Since the 'stay the same' category can be viewed as neutral/zero growth, the 'increase' and 'decrease' categories are used to show the delta." For example, in 2015 43% of respondents expect to increase spending for chemicals, reagents, solvents; 45% expect to stay the same and 12% expect to decrease. In 2014, these percentages were 40%, 44% and 16% respectively. The purchasing indicator – or percent difference increase minus decrease – was 31% in 2015 (43%-12%) and 24% in 2014 (40%-16%).

Spending for laboratory automation is a key area for SLAS members. The 2015 data point to 18% of respondents expecting to increase their spending for laboratory automation products, 76% intending to spend the same as in 2014 and 6% planning a decrease. This tracks quite closely to previous years, pointing to "a very stable category with little fluctuation" per Warawa.

"The spending increase expectation for 2015 is conservative," Warawa explains. "A full 55% of those planning increases are in the 1-10% range followed by 30% in the 11-20% range."

A further breakdown of respondent organizations shows hospitals (29%) and industry (23%) are most inclined to increase spending on laboratory automation. Industry organizations are those companies/corporations involved in areas of basic research, biotechnology, chemicals, clinical, environmental and pharmaceutical. Looking more closely at those market segments, 25% of participants from the pharmaceutical segment expect an increase, and 23% from the clinical segment say there will be an increase.

About the Respondents

There were 815 responses to the survey from the United States and Canada in the study for a confidence level of 95% ±3. Industry was the highest represented category accounting for 37% of the responses. College/university was next at 28%, government at 15% and all other categories under 10% each.

Research was most frequently identified as the department in which respondents work (35%), followed by central service laboratory departments (21%), QA/QC (12%) and development (11%).

Basic research (not product related), education, environmental/water, clinical/diagnostics, service laboratory, biotechnology products and pharmaceuticals are among the wide variety of products/services represented by respondents.

SLAS Members Can Access Study Results

The 2015 North American Survey of Laboratory Purchasing Trends 182-page report is available to dues-paid SLAS members at SLAS.org. Contact Mary Geismann if you need help with your login information. If you are not yet an SLAS member, join today to obtain this report as well as a host of other valuable membership benefits.

"SLAS members can see how laboratories across North America are planning to invest in equipment, staffing and facilities in 2015," says SLAS CEO Greg Dummer. "Understanding the priority concerns of other laboratory professionals and management helps our organization prepare to address member needs and expectations."

In addition to the highlights reported here, the full report includes more detail on personnel and workload changes, laboratory products spending, non-capital and capital equipment budgets. Full data on responses gathered is provided, as is cross tabulation by organizational categories (i.e., industry, hospital, government, college/university, independent/contract lab, contract research organization, contract manufacturing organization and foundation/non-profit organization), departments (research, development, central service laboratory, QA/QC, production/process control/monitors, management, purchasing and teaching/education) and by products/services (i.e., basic research, biotechnology, clinical/diagnostics, education, environmental and pharmaceutical). These options allow readers to dig deep and compare their situations against specific items in the study.

SLAS plans to partner with LPA once again for 2016, and results will be presented at SLAS2016, Jan. 23-27, San Diego, CA.

July 31, 2015