BLS October Jobs Report: Great News in October- Unless you are looking for workers

November 2, 2018

Our TakeJob gains beat consensus expectations, Unemployment is at its lowest level since I was a junior in High school, Participation rate  matches its best  level this year, and  private non-farm wages have risen 3.1%  this year according to this BLS jobs report.  

Bottom linethe US economy is based on consumer spending. This report shows that consumers are growing their purchasing power a positive indicator for the economy going forward.

Facts keep us bullish on manufacturing.

Key Points

  • “Total non-farm payroll employment rose by 250,000 in October, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, in construction, and in transportation and warehousing.”
  •  “In October, employment in manufacturing increased by 32,000. Most of the increase occurred in durable goods manufacturing, with a gain in transportation equipment (+10,000). Manufacturing has added 296,000 jobs over the year, largely in durable goods industries…On average, 213,000 jobs have been added each month  in 2018 YTD.” 
  • “The labor force participation rate increased by 0.2 percentage point to 62.9 percent in October but has shown little change over the year.
  • “In manufacturing, the workweek edged down by 0.1 hour to 40.8 hours, and overtime was unchanged at 3.5 hours.“ 
  • “In October, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $27.30. Over the year, average hourly earnings have increased by 83 cents, or 3.1 percent.“
  • “The unemployment rate remains at it’s 48 year low, 3.7%- lowest rate since 1969.  Interestingly, not a single industry was reported to have lost any jobs.” 
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September and 3rd Quarter 2018- Unseasonably Strong for Precision Machining

November 1, 2018

PMPA’s Business Trends Index for September 2018 came in at 106% of its value a year ago, despite its 7.7% decline from August’s record tying performance. September 2018’s value of 132 is a record for the month of September, a frequent occurrence this year. The September 2018 value of 132 is also 10.4% above the five year average for the index in the month of September. year to date our index indicates that sales  up 10 points or 8% over  the 2017 year-end average.

Unseasonably strong sales in September for Precision Machining Industry.

Opinions for the next three months compared to today:

  • Net Sales: The sales outlook confirms Pareto’s law with 80% of reporting shops expecting sales to improve or remain level over the next three months.
  • Lead Times: Ninety- one percent of respondents expect lead times to remain the same or increase in the next three months.
  • Employment: Prospects for employment are positive with ninety-eight percent (98%) expecting level or increased opportunities for employment.
  • Profitability: Eighty-four percent of our respondents expect business and margins to remain strong for the next three months.

Current Environment: 2018 continues on pace to a much stronger than average sales year as we determined in our April report. The sentiment indicators that we track recognize a seasonal decline ahead, but remain in positive territory for the precision machining industry.  Our industry continues to outperform 5-year averages by a wide margin!

PMPA members can download a full copy of the September 2018 Business Trends Report here

Key takeaway: Our business has changed- have we adjusted our management thinking to match?


OSHA Inspections 2018 YTD Precision Machining Industry

October 22, 2018

OSHA is still fulfilling its mission promoting worker and workplace safety. Safety, Amputations, and Planned Inspections led the OSHA inspection categories for NAICS 332721 so far this year.

At PMPA we take a look twice a week at the OSHA inspections posted online for our industry. In the event that one of our members is on that list, we call immediately to offer our assistance. If it is a non-member, we look to learn what vulnerabilities are being encountered in the industry shops not belonging to PMPA.

Here’s what we found out.

So far this year, OSHA has posted notices of 53  inspections for our NAICS code- 332721 online. 53!

Chart of OSHA inspections frequency for 2018 NAICS 332721 Precision Machining Shops

 

The single largest category were for “Safety” – 15 of 53, 28% of all inspections posted.

Go figure.

The second most frequent category was “Amputations“-12 of 53, 23%.

This really is aggravating. There is no excuse for anyone to be losing body parts. We need to contact our people immediately to review the basics about pinchpoints, rotating equipment, and the pointlessness of trying to stop a lathe with our fingers or thumb. 

I won’t display the photos but if you want to see what a drill can do to a human hand click this link:  Graphic Image

Programmed (planned ) Inspections were third  with 7 of 53 or 13%. Routine enforcement is still a “real thing” at OSHA.

Complaints  came in at fourth  with 4 out of 53 inspections being initiated as a result of a complaint- 8% of inspections due to complaints..

Health tied with Complaints at 4 inspections out of 53- 8% of inspections due to occupational health concerns

Rounding out the ten causes were Noise, Reinspections, Accidents, Referrals, and Inspections.

Reasons cited for OSHA Inspections for NAICS 332721 (frequency) Calendar year 2018 YTD

 

OSHA is still fulfilling its mission promoting worker and workplace safety. The above reasons show how your peers are being examined. Are you ready for an OSHA inspection?

Photocredit: Mystalk

Data and Chart Preparation credit Veronica Hopson, PMPA

Original Data sourced from USDOL OSHA.


Quality Quote

October 10, 2018

No spec, no quality. Know Spec, know quality.

Quality means compliance with all terms of the specification.

Know the specification!


August Precision Machining Sales Reclaims Record!

September 26, 2018

PMPA Business Trends Report reclaims all-time record high of 143 in August. March 2018 was the first time that our sales index recorded such strong sales.

Precision machining Industry Sales and shipments back up to March 2018’s record levels!

Eighty percent (80%) of  our respondents reported sales increases,  51 percent of shops reporting reported sales increases in the double digits.

Sentiment indicators remain strong.

Very positive look forward next three months.

 

Our markets and businesses have changed- have we as managers kept up?

If this was a control chart, you would say the process has shifted upwards…

How are you managing differently for success rather than survival?


August ISM PMI- Highest Reading Since January 2004

September 5, 2018

The ISM PMI was reported at 61.3, the highest reading since January 2004, when it was 60.8.

Prior to that the ISM PMI has not been at this level since 1984, when it was 61.3 in February,  in 1987 it made it to 61.0 in December.

It has been a long time since the ISM PMI was at today’s levels!

Here is the ISM’s Announcement:

“The August PMI® registered 61.3 percent, an increase of 3.2 percentage points from the July reading of 58.1 percent. The New Orders Index registered 65.1 percent, an increase of 4.9 percentage points from the July reading of 60.2 percent. The Production Index registered 63.3 percent, a 4.8-percentage point increase compared to the July reading of 58.5 percent. The Employment Index registered 58.5 percent, an increase of 2 percentage points from the July reading of 56.5 percent. The Supplier Deliveries Index registered 64.5 percent, a 2.4-percentage point increase from the July reading of 62.1 percent. The Inventories Index registered 55.4 percent, an increase of 2.1 percentage points from the July reading of 53.3 percent. The Prices Index registered 72.1 percent in August, a 1.1-percentage point decrease from the July reading of 73.2 percent, indicating higher raw materials prices for the 30th consecutive month.” ISM Timothy R. Fiore Press Release

Positive Takeaways:

  1. Manufacturing continues to expand. the 3.2 point jump from July to August was a substantial increase.
  2. The overall economy continues to expand- 112 consecutive months of economic expansion.
  3. The increases from July to August were especially robust for New Orders (up 4.9%); and Production (up 4.8%).
  4. Other indicators for employment, inventories, supplier deliveries  increased on the order of 2% or more.
  5. The Prices Index fell 1.1 percent in August from July, but still showed increasing costs for raw materials, for the 30th consecutive month.

Thoughts to consider: while past performance is no assurance of future performance, we note that the current level of the PMI has been of prior high water marks,  rather than sustainable levels. While “this time it’s different,” is a possible comment, our look at the graph above suggests that we may be nearing the top. Although the values for the 1964-1966 do provide another possible interpretation.

Bottom line: Manufacturing and the broad economy showed remarkable strength in August 2018. Prospects remain positive for sales and employment in manufacturing. The current strong level of performance convinces me that we must be thoughtfully reconsidering all aspects of our business at this time. This trend might have legs- it might also be nearing a top. PMPA’s Latest Business Trend Report was optimistic on Outlook for the next three months.

ISM August 2018

Graph courtesy Calculated Risk


Performer Day- Its About Performance, Not Labor

September 3, 2018

I compile the annual wage survey for the precision machining industry, and my sample is a nice slice of industry shops.

We don’t have any labor jobs in our shop hourly wage survey.

None.

Nada.

Zip!

Zero!

On the other hand, the jobs that we do have are all jobs requiring high levels of process ownership and personal performance.

Think of all of the aspects of our jobs- the tools, the offsets, the relationships between datums, the materials, the gages, the chips and their control, the coolants, the controls, the software code- and suddenly being a machinist looks a lot like being a Performer:

Almost as much stuff to keep track of as we have as machinists!

So today, I’m going to cue up a Neil Peart video on Youtube as an appreciative salute to the music made  on our production machines under the watchful practice of our skilled performers.

I’m not celebrating Labor Day.

But I am certainly going to  use the time to appreciate the performers in our shops who make things that make a difference.

Happy Performers Day.

Photo credit 

More info about the Human Performance System Approach to understanding our shops

Neil Peart photo