December ISM PMI Report- Beware the Bears!

January 13, 2015

There are a number of reasons that one could be bearish about the December ISM PMI report. But that doesn’t mean that we should be.

grizzly-bear duffle blog

“The December PMI® registered 55.5 percent, a decrease of 3.2 percentage points from November’s reading of 58.7 percent. The New Orders Index registered 57.3 percent, a decrease of 8.7 percentage points from the reading of 66 percent in November. The Production Index registered 58.8 percent, 5.6 percentage points below the November reading of 64.4 percent. The Employment Index registered 56.8 percent, an increase of 1.9 percentage points above the November reading of 54.9 percent. Inventories of raw materials registered 45.5 percent, a decrease of 6 percentage points from the November reading of 51.5 percent. The Prices Index registered 38.5 percent, down 6 percentage points from the November reading of 44.5 percent, indicating lower raw materials prices in December relative to November.”

 

test text

Actually, look how far above we are above the expansion / contraction line…

“The December PMI declined 3.2 percentage points from November,” roared the bear.

“The New Orders index dropped by 8.7 percentage points from November’s reading,” growled his sidekick.

“The Production Index fell 5.6 percentage points from November,” sang the Bear Chorus.

What are we to make of these Bearish indicators? Not much, really. Here’s why.

  • Its seasonal really. It is the end of the year. Companies are going to have to pay taxes on unsold inventory.
  • Yes it is below expectations. But does that tell us more about the PMI, or about the quality of the “expectations?”
  • 11 of 18 manufacturing industries reported growth in December. 

So please, before you order flowers and a sympathy card- consider this. The December reading above 50 indicates Manufacturing expansion for the  19th consecutive month, and by being above 43, an expansion of the US economy- for the 67th consecutive month.

P.S. Not to worry “The Employment Index registered 56.8 percent, an increase of 1.9 percentage points above the November reading of 54.9 percent. Inventories of raw materials registered 45.5 percent, a decrease of 6 percentage points from the November reading of 51.5 percent. The Prices Index registered 38.5 percent, down 6 percentage points from the November reading of 44.5 percent, indicating lower raw materials prices in December relative to November.” Stronger employment lower inventories, and lower material prices are all positives for Manufacturing.”

The decline in the  December 2014 PMI index is normal expectancy and nothing to worry about as I see it. Just look at the graph and all the other positive indicators.

Wave bye-bye, bear.

Wave bye-bye, bear.

 

Bear photo courtesy The Duffel Blog

Graph courtesy The Calculated Risk Blog

Waving bear link

 


2014 in review

January 9, 2015

The WordPress.com stats helper monkeys prepared a 2014 annual report for this blog.

Here’s an excerpt:

The Louvre Museum has 8.5 million visitors per year. This blog was viewed about 130,000 times in 2014. If it were an exhibit at the Louvre Museum, it would take about 6 days for that many people to see it.

Click here to see the complete report.


Ancient Orichalucum Metal Ingots Recovered from Shipwreck off Sicily

January 8, 2015
2600 years later, we have samples to analyze...

2600 years later, we have samples to analyze…

According to Discovery News  this week, “Gleaming cast metal called orichalucum, which was said by Ancient Greeks to be found in Atlantis, has been recovered from a ship that sunk 2,600 years ago off the coast of Sicily…the 39 ingots found on the sandy sea floor represent a unique finding.”

“Today most scholars agree orichalucum is a brass-like alloy, which was made in antiquity by cementation. This process was achieved with the reaction of zinc ore, charcoal and copper metal in a crucible.

Analyzed with X-ray fluorescence by Dario Panetta, of TQ – Tecnologies for Quality, the 39 ingots turned to be an alloy made with 75-80 percent copper, 15-20 percent zinc and small percentages of nickel, lead and iron.”

Ancient Origins  reports “The name orichalucum derives from the Greek word oreikhalkos, meaning literally “mountain copper” or “copper mountain”. According to Plato’s 5th century BC Critias dialogue, orichalucum was considered second only to gold in value, and was found and mined in many parts of the legendary Atlantis in ancient times.

Maybe the greenhouse gasses emitted by Atlantis’ cementation industries producing orichalucum caused the seas to rise, covering Atlantis…

 


OSHA Reporting Requirements for Employers Now in effect- Update

January 1, 2015

Employers! These requirements are now in effect!

A new wallet card issued by OSHA will help your supervisors understand the changes to  Injury and Illness Reporting Requirements that go into effect in January 2015.

Get the card here as a  printable pdf

New wallet card available from OSHA.

New wallet card available from OSHA.

What are the new requirements?

 “Under the final rule, employers must report the following events:
    1. Each fatality resulting from a work-related incident, within 8
hours of the death. This requirement applies to all fatalities
occurring within 30 days of a work-related incident. See Sec. 
1904.39(a)(1) and (b)(6). This is the same as the current regulation
and the proposed rule.
    2. Each in-patient hospitalization resulting from a work-related
incident, within 24 hours of the hospitalization. This requirement
applies to all in-patient hospitalizations occurring within 24 hours of
a work-related incident. See Sec.  1904.39(a)(2) and (b)(6). Under the
proposed rule, employers would have been required to report all in-
patient hospitalizations within 8 hours, for hospitalizations occurring
within 30 days of a work-related incident. Under the current
regulation, employers are required to report, within 8 hours, in-
patient hospitalizations of three or more employees, for
hospitalizations occurring within 30 days of a work-related incident.
    3. Each amputation resulting from a work-related incident, within
24 hours of the amputation. This requirement applies to all amputations
occurring within 24 hours of a work-related incident. See Sec. 
1904.39(a)(2) and (b)(6). Under the proposed rule, employers would have
been required to report all amputations within 24 hours, for
amputations occurring within 30 days of a work-related incident. Under
the current regulation, employers are not required to report
amputations.
    4. Each loss of an eye resulting from a work-related incident,
within 24 hours of the loss of an eye. This requirement applies to all
losses of an eye occurring within 24 hours of a work-related incident.
See Sec.  1904.39(a)(2) and (b)(6). The proposed rule would not have
required employers to report losses of an eye, and the current
regulation also does not require them to do so.”- Federal Register

These requirements go into effect January 1, 2015

Get the wallet card and review the upcoming changes with your team now. 

 

 

 

 

 

 


Capturing the Holiday Spirit

December 24, 2014
No telling on what the State troopers busted this jolly old elf for, but we bailed him out with donations to the local food bank...

No telling on what the State troopers busted this jolly old elf for, but we bailed him out with donations to the local food bank…

We are fortunate to have our trade, our businesses, our ability to produce highly engineered components that make a difference in peoples lives by making technology operate safely and as expected.

I call the satisfaction from my work the “existential joy of engineering,” though that phrase is not original to me.

The holidays are a great reminder of the blessings that we have, and the fact that we are more fortunate than others.

I hope that your celebration of the holidays remind you of what is right in your world, and of your opportunity to help others as you see fit.

And like the Medina Post of the Ohio State Patrol,  I hope that you too get to “capture” a bit of the holiday spirit (or elf) to share with your family and friends.

Thanks to the Medina Post of the Ohio State Patrol for their part in the “Can the Cruiser” food drive.

And our best wishes  and gratitude to you, the men and women of the precision machining industry, our world is safer and more reliable because you do what you do.

 

 


Most Read Posts in 2014

December 23, 2014

Here are our  ten most read posts this year:

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The Difference Between Accuracy And Precision Measurement In Your Machine Shop

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Hardness vs. Hardenability-There Is A Difference

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7 Causes For Quench Cracking Of Steel

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5 Facts About Manganese in Steel

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5 Questions for ForkLift Inspection Compliance

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7 Advantages of Friction Welding

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5 Benefits of Cold Work in Steels

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5 Engineering Aspects of Austenitic Grain Size

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Blue Brittleness, Temper Embrittlement, 400-500 Degree C Embrittlement And More

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Multiple Solutions, Custom Tooling, And Your Precision Machining Shop

We hope that you find this review of our most popular posts helpful to your work in the upcoming year.


November PMPA Business Trends- A Return To Seasonal Normal

December 22, 2014

 

The PMPA Business Trends Report Sales index for November plummeted 23 points from 132 to 109, a drop of almost 17%. Here are 5 reasons why we are unconcerned by what most would call a panic-worthy drop.

That drop tells us more about October's record than it does about November sales

That drop tells us more about October’s record than it does about November sales

  • The November value of 109 actually “just happens to be” the arithmetic average of the index for the last 4 Novembers.
  • The drop is more  about the record high in October than it is about a low November.
  • Sentiment for Lead Time remains level for the next three months- our shops know their capacity and see it remaining the same.
  • Sentiment for future  Profitability, Employment, and Sales all increased in November despite the drop in actual sales.
  • November and December are typically weak sales months for our industry. January sales will likely be “gangbusters” as our customers return to work after end of year tax inventory and holiday shutdowns.

By the way, the average length of first shift hours scheduled was 43.5 hours, just a half an hour short of 44 hours- which means average shop in our industry was just short of working 10% overtime as a regular schedule- despite that “huge drop” in sales.

The outlook for precision machining is looking strong according to the 87 respondents in our survey and report.

PMPA Business Trends Report for November 2014

 

 


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