Level Precision Machining Industry Sales Beat Fed Industrial Production Numbers for February 2016
With 81 companies responding, the PMPA Business Trends Index in February 2016 remained level at 117.
The glass half full interpretation of this is that we did not get the traditional February decline from January.
The glass half empty interpretation is that February 2016 is down five points or four percent from February 2015. Year to date our index is just 95% of that of same period 2015.
The good news is that our index’s remaining level beats the Industrial Production DECREASE reported by the FED for February of 0.5 %.
What are you seeing for sales in your shop?
It’s true that the typical February decline is due to end of year inventory controls, which artificially inflate January. A good portion of our customers have gone to a mid year fiscal cycle, ourselves included.. A better portion of our customers have adopted lean, JIT, or quick response manufacturing practices where inventory is dock to stock and stock levels are managed daily, making inventory almost none existent. Is there any evidence of this in the year to year trend? Are sales figures becoming even closer to real time with manufacturing orders? There is still a great deal of uncertainty in the markets and it takes a really innovative type to deal with uncertainty, seems that is the norm of late. Industries have been hit or miss within precision components as a whole.
It would be difficult to winnow out the effects of such programs in aggregate. If your premise is correct, then we would see that the Sales total business and Inventories total business would track closely as they did in 2014. However, in 2015 these two indicators seemed to be negatively correlated. I’ll do a follow up post based on your query. I think that it is a great question.
[…] Ryan asks this in response to our post February Precision Machining Shipments Level With January . […]