Manufacturing Outlook Summer 2011

The predictions are mixed, but if  we were giving the small craft weather advisory   summer outlook for precision machining, we’d say mostly sunny,   partly cloudy,  choppy seas, and increasing headwinds.

Maybe a little choppy...

Mostly sunny. Lets face it compared to the summer of 2009 it’s a great day to be in manufacturing. PMPA’s Business Trends Sales index is back above 110 and up to pre 2007  levels.

Partly cloudy. We really don’t have a lot of transparency on our customers demand forecasts. Because our customers  don’t either.

Manufacturing has lead the current recovery, not consumers. With housing values depressed, consumers don’t have a lot of cash to buy, so everyone is “blind” to where the broad demand will come from and for what.

Choppy seas. Because while the official statistics don’t say inflation, the prices and surcharges we see for the critical raw materials we need to make our precision engineered components are certainly on the rise. But our customers are conveniently in denial. So plenty of waves and hidden rocks in our short term.

Increasing headwinds. Once the banks see even the slightest slowdown in order book  they will almost certainly be tightening up capital requirements. Then we won’t be able to  get favorable terms on the loan we need to buy that more expensive raw material, that new high technology cost- and labor- saving machine, or working capital to make payroll.

That’s our weather report. Mostly sunny, partly cloudy, slight choppy and increasing headwinds.

What a great day to be out on the water in  precision manufacturing!

Thanks to Northwest Paddling for the great photo. Maybe some day…

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One Response to Manufacturing Outlook Summer 2011

  1. […] Manufacturing Outlook Summer 2011 […]

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