August 2011 ISM Manufacturing Report-Manufacturing Still Expanding

Precision Machining is a subset of Fabricated Metals which was one of the sectors reporting continued strength in August.

Economic activity in the manufacturing sector expanded in August for the 25th consecutive month, and the overall economy grew for the 27th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

Without vital precision machined components, many products won't work or can't be made!

“The PMI registered 50.6 percent, a decrease of 0.3 percentage point from July, indicating expansion in the manufacturing sector for the 25th consecutive month, at a slightly slower rate.” While the index declined from July, it still remains above 50, indicating expansion.

Ten manufacturing sectors reported growth including:  Wood Products; Petroleum & Coal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Fabricated Metal Products; Paper Products; Transportation Equipment; Chemical Products; Computer & Electronic Products; and Machinery.

Precision machined products can be found in some fashion in all of these sectors- either incorporated into a product or in the tooling and process infrastructure of these industries.

The ISM reported some areas of concern.

“The Production Index registered 48.6 percent, indicating contraction for the first time since May of 2009, when it registered 45 percent. The New Orders and Backlog of Orders Indexes edged up slightly from July, but both indexes are indicating contraction in August at slower rates than in July. The rate of increase in prices slowed for the fourth consecutive month, dropping another 3.5 percentage points in August to 55.5 percent. The overall sentiment is one of concern and caution over the domestic and international economic environment, which is affecting customers’ confidence and willingness to place orders, at least in the short term.”

While all is not rosy, we are not ready to throw in the towel on what may in fact be just the result of slow seasonality  in this report. Anecdotally, PMPA shops are scheduling overtime, and have positive outlook for sales, shipments, and other key indicators over the next three months.

Here’s a secret: While every body thought that going to college was a “must” to have a good career, the fact is that skilled workers are in high demand in U.S. manufacturing shops in precision machining and fabricated metals. Just like our products are.

Check out the Manufacturing Institute Labor Day Survey here. It shows how people are missing the boat on careers in manufacturing.

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