Here are three reasons for optimism for 2011 for our Precision Machining Industry:
1) Metal Service Center Shipments in November
Metals service center shipments of steel and aluminum products rose robustly in November, perhaps signaling the beginning of a sturdier recovery for the metals industry, the Metals Activity Report from the Metals Service Center Institute shows. Year-over-year steel shipments from U.S.-based service centers rose 28.4% during November; Canadian shipments were 19.5% above year-ago volume. U.S. aluminum shipments were 38.8% higher than in November 2009, while Canadian shipments of the light metal rose 18.3% from last year. In each case, the sequential rise in shipments from October volume was pronounced. Link
Double digits shipments increases = Optimism.
2) Auto Sales SAAR (Seasonally Adjusted Annual Rate) are approaching 13 million
“U.S. auto sales rose more than 11 percent in 2010 to almost 11.6 million vehicles, snapping a four-year slide that forced the Detroit automakers into a wrenching restructuring that included government-directed bankruptcies for GM and Chrysler.
“In a year-end surge that took the industry by surprise, the annualized sales rate for December jumped to almost 12.6 million vehicles, the highest rate since August 2009 when the U.S. government’s “Cash for Clunkers” trade-in incentives touched off a short-lived boom.”
Automotive is traditionally 25% of precision Machining industry sales according to PMPA Business Forecast reports.
3) First Shift Hours
The early returns for our January Business Trends Reports show many shops scheduling first shifts of over 45 hours.
Shifts> 45 hours = Immediate Demand