The latest North American Survey of Laboratory Purchasing Trends reveals a "steady as you go" position for personnel and purchasing in 2013. This annual report allows laboratory science and technology professionals to make and adjust plans based on sound information and historical data. The study is available for free to SLAS members.
SLAS and the Laboratory Products Association (LPA) provide valuable information through the annual North American Survey of Laboratory Purchasing Trends report.
"When creating business plans or explaining performance, SLAS members can turn to the information reported and trends shown in this annual study," explains SLAS Chief Executive Officer Greg Dummer, C.A.E. "This recurring top-of-the-line study offers loads of data that provide an overall perspective as well as information by market segment. The historical analysis gives it the teeth necessary to help our members plan properly."
Since 2008, SLAS has partnered with LPA to conduct this annual study, issue the report and build a story of 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
The most recent report was compiled from surveys gathered in December 2012, which asked SLAS members and nonmembers questions about their expectations for 2013.There were 1,019 responses presenting a confidence level of 95%±3.
The survey is robust and includes questions related to personnel, workload, outsourcing, budgets and new laboratory building plans. Responses are cross tabulated across various market segments such as industry, hospital, government, college/university and independent/contract laboratory and specific product/service areas like basic research, biotechnology, chemicals, clinical, environmental and pharmaceutical.
"Additionally, there is another rather unique portion to the yearly LPA study," says K.C. Warawa, president of K.C. Associates, the marketing research firm contracted to conduct the study. "Each year, we look at a new, specific target identified for that year. In year's past, we have focused on green laboratories, effects of the American Recovery Act or use of social media. This year, we asked questions regarding awareness of and concern about The Budget Control Act of 2011 and potential impact of expected sequestration cuts."
Clark Mulligan, C.A.E., LPA president, values the relationship with SLAS and believes this effort provides meaningful information for both organizations.
"LPA and SLAS share common interests in the information studied and feel good about joining together on this research," Mulligan says. "A few years ago, we moved to conducting the survey in December versus earlier in the year so that respondents have almost a complete year of activity as well as their next year budgets in place, which provides more accurate information to answer the questions."
The study looks at three areas of laboratory spending – consumables, non-capital equipment and instruments and capital equipment and instruments.
"Liken it to your kitchen at home," Warawa explains. "You have items that you have to replace all the time, like butter and eggs. In the lab, it is chemicals and glassware and reagent kits. These are the consumables.
"Then you have your midsize group, the toasters and mixers and small ovens – that whole assortment of items that sits on your counter at home," she continues. That's lab equipment like ovens, heating units, drying agents – things that are meant to be there more than a year or two but wear out. Finally, there is the capital equipment. In the kitchen, it is your refrigerator or built-in oven. In the laboratory, it's the analytical instruments. Those are the workhorses of the lab, and they're expensive running from $50,000 to $250,000."
Citing the study report, Warawa indicated that in 2008 respondents were optimistic about consumables, those items you need to buy to keep existing work moving along. When looking at the difference between those respondents who are increasing their purchases and those who are decreasing, the difference (positive minus negative) provides an "indicator." This difference is seen in consumables that were at 28% (positive minus negatives responses with a remainder of +28%), while the other two categories were smaller at 12% each.
"In 2009, there was a bit of a knee-jerk reaction to the failing economy," Warawa says. "Consumables were almost cut in half, while non-capital spending went down to 3% and capital spending down to 7%. That's contracted spending."
The year 2010 saw "a little bit of relaxing, but relaxing on the low end only," Warawa offers. Consumables went up 4% and non-capital went up 1% while capital stayed the same.
"In 2011, feelings were positive," she continues. "Consumables went back up to a positive 28% and non-capital climbed to a positive 12%. Because capital equipment had been so low for so long, it exceeded where it was in 2008, coming in at 14%. In 2012, we see another pullback. We had all the things happening in Washington like the debt ceiling crisis and things weren't going so well. Responses were not as bad as they were in 2009, but they were pulled back quite a bit. In 2013, responses pretty much stayed the same as 2012 with consumables at 22%, non-capital up just 2% and capital the same. It's stable."
"Expected hiring is a perfect indicator of what is happening in the lab," Warawa states. "Our data shows that what was projected for this year and last year is pretty much identical. Looking back at 2008, 51% of respondents said they were doing no hiring whatsoever while 28% said the only hiring was replacement hiring and 17% were increasing staff."
Those numbers shifted to a bleaker picture in 2009 and 2010 before showing signs of life in 2011.
"The industry became optimistic in 2011 and 25% – that's one out of four respondents – said they'd be increasing their staff," Warawa adds. "This is a straight increase; it's not replacement. Replacements stayed pretty static all the way across. So those saying they would be hiring went up to 25%, pulled back down to 21% for 2012 and then pulled back a little bit more to 19% for 2013. But it's really fairly stable. In times when we were flying high, organizations were building up the size of the labs. Then, it went down substantially, but in 2013 we're basically back to where we were in 2008. We got rid of that little bump in the road."
The North American Survey of Laboratory Purchasing Trends report includes comparison data for what happens to staffing when workloads increase, decrease or stay the same. Perhaps most interesting is the data for what happens when the workload is expected to decrease, Warawa says.
"You can see a lot of red in this part of the study," Warawa says. "If workload decreased, there was no hesitation to cut back in 2011 and 2012. You look at 2012, that's only last year, 68% of the respondents still said if work goes down, staff goes down. It is looking more stable for this year with 7% saying they're going to increase staff even if their workload decreases."
"There was a lot of kicking the can down the road surrounding The Budget Control Act of 2011, and how decisions regarding grant money would have a significant effect on the providers of instrumentation and products for the lab," Warawa says. "When labs get new grants, they often need new equipment and supplies for that particular research."
According to Warawa, the prevailing feeling is that organizations with long-term grants in place felt they could weather the sequestration.
The 2012 study data showed, for example, roughly 75% saying projected spending would "Stay the Same" for "Analytical/Life Science Instruments," just one of the general categories studied. Those choosing the two decrease categories ("Not Sure but Probably Decrease" and "Decrease") in 2012 totaled 16% and tipped the balance negatively as only 8% chose the two increase categories ("Not Sure but Probably Increase" and "Increase"). In 2013, those selecting the two increase categories more than doubled, equalizing the two extremes. The move to the increase side came from those in the middle where 64% now selected projected spending "Stay the Same" for "Analytical/Life Science Instruments."
Warawa believes the biggest take-away from this year's study data is, as stated earlier, that respondents see slow and steady growth even in the midst of the economic woes that have been hammering the daily news.
"Thousands of people over three years seem to agree on slow and steady growth, both in the next six months as well as over the next 12-18 months," she says. "When we look at respondent views of economic conditions over the last three years, there is this huge bubble in the middle. The only real change is some shift from accelerated growth to slow and steady growth. Nobody sees a booming market and few see double dip recession."
In addition to deeper dives into purchasing indicators, personnel/workload scenarios and general economic concerns, the North American Survey of Laboratory Purchasing Trends report also includes data on operating budgets, laboratory building plans, outsourcing (research, development, production, human resources/facilities, finance functions, information technology, purchasing), funding sources, products that should be produced and general classification questions.
Full data on responses gathered is provided, as is cross tabulation by organizational categories (i.e., industry, hospital, government, college/university, independent/contract lab) and by products/services (i.e., basic research, biotechnology, chemicals, clinical, environmental, pharmaceutical). This allows readers to dig deep and compare their situation against specific items in the study. For example, SLAS members facing staff cutbacks in their academic laboratory would want to review the cross tabulations by college/university in the "Workload vs. Personnel" sections of the report.
SLAS members can access for free the full 289-page .pdf file at SLAS.org. Contact Mary Geismann at firstname.lastname@example.org 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 plans to partner with LPA once again for 2014. The survey will be conducted in December 2013 and the results will be presented at SLAS2014, the Third Annual SLAS Conference and Exhibition, January 18-22, San Diego, CA.
April 22, 2013