Precision Machining Industry- A Canadian Impact

December 9, 2013

While we can identify over 13oo “machine shops” in Canada, here is a quick look at the impacts of 60 that we know are in the “Screw Machine Capable” Contract Manufacturing Sector. Here are asome facts we plan to share with the MP’s and Ministers when we join the Canadian Manufacturing association for their Manufacturing Day on Parliament Hill in Ottawa.

Here's hoping it's warm...

Here’s hoping it’s warm…

Precision Machining IMPACTs:

Companies                         62  *(See note below)

Employment                      1488

Shipments                           $242,524,656 (A quarter of a billion dollars!)

Payroll                                  $67,155,140

Exports markets                 Motor vehicles and parts (34.7%)

Mechanical Equipment (9.2%)

Electrical Machinery (4.0%)

Plastic Products (3.5%)

Precision Machining is an industry that produces large volumes of highly engineered components used in other manufactured goods. Best described as NAICS 332721- Precision Machining, it is often referred to as Screw Machining, based on the historic use of automatic screw cutting machines employed to make high volumes of parts.  The largest part of the industry is involved in contract manufacture of large volumes of customer designed parts. Automotive Industry is the largest industry served, accounting for over 25% of industry shipments, and this fits well with Ontario’s Top International Export  in 2012 being Motor vehicles and parts at 34.7%.

Our parts play a major role in four of Ontario’s five largest international exports-  Motor vehicles and parts (34.7%); Mechanical Equipment (9.2%); Electrical Machinery (4.0%); and Plastic Products (3.5%). (Precision machined components are often molded into many plastic parts and assemblies.)

*(Precision machine shops: In Ontario alone, PMPA has identified 62 Screw Machine capable companies. In addition we know of over 1,371 additional “machine shops.” Figures provided were limited to  the 62 contract manufacturers we have identified. Our figures, therefore, are a lower bound estimate.

Data: http://www.fin.gov.on.ca/en/economy/ecupdates/factsheet.pdf ;  U.S. Census  2011 Survey of Manufacturers Data; PMPA


Manufacturing Jobs – What You Need (And Want) To Know

January 7, 2013

Four of the top five manufacturing sectors by added employment  in 2012 were key markets served by precision machining; Transportation Equipment, Motor Vehicles and Parts, Fabricated Metal Products, Machinery.

(The fifth market was Food Manufacturing, and yes, some of our companies make parts for food service too- think blender parts, nozzles and components for food dispensing, preparation and packaging equipment.)

Graph courtesy Chad Moutray, National Association of Manufacturers, NAM.

Graph courtesy Chad Moutray, National Association of Manufacturers, NAM.

According to the Bureau of Labor Statistics, the number of Jobs in Manufacturing increased by 180,000 in 2012.

“In December, manufacturing employment rose by 25,000, with small gains  in a number of component industries. In 2012, factory employment increased by 180,000; most of the growth occurred during the first quarter.”

“In December, the average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours.”

While there are signs that manufacturing employment gains have slowed down in the second half, those were connected to the economic uncertainties tied to the Presidential Election, Fiscal Cliff, and Global Economic Slowdown. Two of these three special causes are now behind us.

As the graph above shows, Manufacturing is the place to look for employment gains.

The softness in manufacturing employment in the last half of 2012 belies the demand that our industry will have for talented workers going forward. As the BLS workweek hours indicate, Manufacturing currently is using overtime to meet its needs. Given demographic trends, current lean staffing, and the push to reshore production, any economic upturn at all will be strongly bullish for employment prospects in Manufacturing in 2013.

Improvements in Housing Markets are already visible and  a 15+ million auto sales forecast are two indicators that suggest if you want to find a well paying job in 2013, Precision Machining (Advanced Manufacturing) is a great place to apply.

For information about careers in Precision Machining, check out our Career Resources Page on the PMPA Website.

Find a training program near you using PMPA’s Comprehensive Jobs Training Database.

I continue to speak with instructors, counselors, and officials at local community colleges across the country. They are unanimous in saying that their machining students “have multiple job offers before they graduate.”


Industrial Production Index July 2012 Shows Manufacturing in Positive Light

August 16, 2012

Industrial Production (IP) increased 0.6 percent in July after having risen 0.1 percent in both May and June.

This explains manufacturing’s contribution to the U.S. Economy too.

In July, manufacturing output increased 0.5 percent and was 5.0 percent above its year-earlier level. The factory operating rate moved up 0.2 percentage point in July to 77.8 percent, a level 1.0 percentage point below its long-run average.

Capacity utilization for total industry moved up 0.4 percentage point to 79.3 percent, a rate 1.0 percentage point below its long-run (1972–2011) average.

Revisions to the rates of change for recent months left the level of the IP  index in June little changed from its previous estimate. Manufacturing output rose 0.5 percent in July, the same rate of increase as was recorded for June.

At 98.0 percent of its 2007 average, total industrial production in July was 4.4 percent above its year-earlier level.

The production index for durable goods increased 0.8 percent in July.

Gains of more than 1 percent were recorded in

  • Primary metals,
  • Computer and electronic products,
  • Motor vehicles and parts,
  • Aerospace and miscellaneous transportation equipment,
  • Miscellaneous manufacturing.

Manufacturing  is up 5 % from July 2011 to July 2012. 

Manufacturing continues to be a strength of the U.S. Economy. The U.S. manufactures more than Brazil, Russia, India, and China combined. If U.S. Manufacturing was a country, it would be the sixth largest in the world.

Fred Graph

IP release


Top Ten Employment Gaining Sectors in Manufacturing November 2011

December 7, 2011

Just the top five manufacturing sectors shown below contributed 239,900 net new jobs in 2011 year to date through November  according to BLS data.

Leading the way. Data through November.

Precision Machine shops like PMPA members are impacted as follows :

Transportation Equipment: This sector makes up a large share of precision machined industry shipments.

Fabricated Metals: 1)  Precision machining is a subset of Fabricated Metals. From our conversations with shop owners almost every shop is looking for skilled people for immediate work; 2) Many of our products are sold to customers that are also considered Fabricated Metals.

Machinery: We both purchase machinery and make components that are critical to the manufacture of machinery and equipment.

Motor Vehicles and Parts: This is traditionally the largest market served by the precision machining industry.

Primary Metals: Our suppliers of the majority of raw materials machined.

Semiconductors, Computers : Yep. We make parts for these as well as equipment used in their manufacture.

Beverages and Tobacco: That fountain drink you purchased  probably was dispensed through nozzles and fittings made by a precision machine shop.

Chemicals: We make important sensor, fitting, and pressure vessel components for theis Better things for better living industry.

Bottom Line: almost a quarter million net new manufacturing jobs have been added so far in 2011 in manufacturing areas directly related to proecision machining.

Manufacturing, not politicians, is leading this recovery in jobs.

Soda Fountain


Rail Shipment Indicator- Manufacturing and the Tangible Economy

December 14, 2010

When I was a blast furnace burden clerk at USS back in the 1970′s, the hot metal production that I reported was the CEO’s critical indicator for the Company. He knew that he couldn’t possibly track every product and process in the far flung USS empire. 

However, he did know that he couldn’t get more finished steel  production out of his company than was originally produced as hot metal in the blast furnaces.

So blast furnace production was the single most important production indicator that was used to manage the business.

2010 remains above 2009 and 2008 data.

Rail shipments are an equally valid indicator to those of us in manufacturing- raw materials such as iron ore, semi finished products such as steel, and finished goods such as motor vehicles are all a component of the Monthly Carload Report compiled by the Association of American Railroads.

U.S. freight railroads originated an average of 284,407 carloads per week in November 2010, for a total of 1,137,626 carloads for the month.

 That’s up 4.5% over November 2009.

Year-to-date carloads the end of November 2010  were 13.46 million, up 7.1% from the 12.57 million through same time period in 2009.

The following chart shows us just how well the “tangible economy” has come back: 

 

 
November  2010 was the ninth straight month with higher year-over-year average weekly rail carloads  something that hasn’t happened since 2004. I like where we are!

According to the AAR comparing shipments in November 2010 to November 2009,

  • Metallic ores shipments are up 86%;
  • Primary Metal prodyucts (mostly steel) up 26%;
  • Waste and Scrap (largely scrap) up 11.4%.

There are a lot of conflicting and confusing indicators being circulated in the media today. We continue to be a fan of rail shipments as an indicator of the real status of the ‘Tangible Economy’ of manufacturing. Just like the iron production numbers I helped track back in the day,  These rail shipments are a great proxy for manufacturing to come (ore and scrap shipments) and present manufacturing (Motor vehicle and parts shipments) as well as a proxy for the larger economy that is built of the ‘stuff’ carried by rail.

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