May 2017 ISM PMI- About The Same, And That’s OK

June 5, 2017

Despite our addiction to ever changing news-cycle dramatic headlines, the increase of just  a skosh (0.1 percentage point from April’s 54.8 percent to 54.9 percent) signifies that manufacturing is still expanding- albeit very slowly. At 54.9 percent, the ISM PMI Index remains strongly above 50 percent, indicating that the manufacturing economy is generally expanding.

Up just a skosh, and we’re fine with that!

 

According to Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee, the New Orders Index also increased 2 percent while Production Index declined 1.5 percent. Fabricated Metals was one of the 15 manufacturing industries that reported growth in May.

 

 

A solid report for manufacturing.

Our April PMPA Business Trends Index showed us that 2017 will be a strong year for our industry. This latest ISM PMI report is one more piece of evidence that supports that. Here is what Fiore had to say,“The past relationship between the PMI® and the overall economy indicates that the average PMI® for January through May (56.1 percent) corresponds to a 4.0 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI® for May (54.9 percent) is annualized, it corresponds to a 3.7 percent increase in real GDP annually.”

Precision machined products are crucial enablers of today’s technologies. the increase in GDP indicated by this latest ISM PMI report argues for an equivalent increase in the precision machined products  our shops manufacture for the same period.

We hope that you are managing your shop for success. Our savvy shops are.

 

ISM PMI Report May 2017

Graph Courtesy Calculated Risk Blog

PMPA April 2017 Business Trends Report

Skosh


Effective Communication- Congressional Plant Tour Pioneer Service Inc.

June 2, 2017

Pioneer Service Inc. recently hosted US Congressman Raja Krishnamoorthi and Addison Mayor Rich Veenstra along with Illinois Manufacturing Excellence Center (IMEC) representatives John Bradarich and Jim Dunbar for a tour and discussion of  workforce and other issues faced by small precision machining companies. The discussion also covered the support and resources  brought by IMEC, the supporting Manufacturing Extension Partnership (MEP), PMPA  Precision Machined Products Association ,  and others that have helped Pioneer transform it’s product line and workforce.

Congressman Krishnamoorthi see’s first hand what modern precision manufacturing looks like.

Pioneer Service became actively engaged with the Precision Machined Products Association (PMPA), in 2015, for technical expertise, training, as well as political advocacy for manufacturing issues. The congressman and mayor were able to see and hear how networking with these organizations and others has helped Pioneer get the resources needed to help them transform their processes and products from simple shafts to complex CNC machined parts, keeping over 30 people employed.

Changing the perception of Manufacturing is critical if we are to attract the next generation of skilled workers with careers that will place them solidly in the middle class. All of us need to help our neighbors, local and national elected officials understand the value that our people and processes  create in our precision manufacturing shops. Hosting your congressman is  a great way to start that discussion.

Thanks for taking the time to get the conversation started, Aneesa. 

Pioneer Service Blog Plant Tour


OSHA Mandatory Electronic Injury and Illness Reporting Delayed

June 1, 2017

No Formal Announcement. Why?

No Entry in the Federal Register. Why?

No Official Statement. Why?

Just a tiny little update buried in the middle of the OSHA Injury and Illness reporting Web page. We discovered it while doing some fact checking to make sure that we gave our members advance notice of the new reporting requirements which would have been July 1, 2017! 

No Federal Register Entry, No Official Statement, just a sneaky little snippet buried without fanfare on a web page…

Since OSHA hasn’t even given us the courtesy of a formal statement, we have no idea how long the delay will last.

But here are some questions we’d ask the agency that threatens our shops  with fines and penalties for non-compliance with their dictates:

  1. Have you set up that electronic infrastructure (secure computer system) for our reporting to be entered that you assured us at the hearing would be available?
  2. Have you hired contractors to create  that secure computer system for our reporting to be entered?
  3. Have you tested the security protocols on this secure electronic system so that employers and their employees can be assured of the security of our data?

Note to shops- despite the Agency’s inability to hit its own deadlines, you can be assured that the retaliation provisions of this rule  and their  new take on “employee right to report” will remain enforceable. 

Our original post on this rule

Link to OSHA Injury and Illness Recordkeeping Page


April Shipments, Despite Correction, Give Positive Outlook for Shipments

May 25, 2017

Precision machined products shipments for April, as captured in PMPA’s Business Trends April Report, declined 20 points or 14.5% from last month’s record high of 138 to 118.

This correction does not bother us at all…

So why are we not bemoaning a 20 point, almost 15% decline in shipments?

  • The latest number, after the drop, is still one point above last year’s full year average of 117.
  • April’s 118 is down 4.2 points from the average of the last five years’ April values which is 122.2. Well within expected range
  • The March – April decline matches directionally with that of the last three years.
  • The 3-month moving average remains well above the 12-month moving average.
  • The sentiment indicators that we track for Shipments, Lead Times, Employment, and Profitability are all strongly positive for the next three months.

Our market has changed.

Our year to date average indicates that 2017 will be a strongly positive year for precision machining.  See the special addition to our report on the very last page.

If you are still managing your business based on the hunker-down, avoid-all-risk- thinking that kept you in the game over the past 8 years, you are likely missing some serious opportunities. See our article Change to Thrive

PMPA members can get the full PMPA Business Trends Report HERE

Accredited media can contact mkirchenbauer@pmpa.org to receive a copy via email

PMPA provides our members with actionable data so that they can calibrate their performance to that of their peers.

Did your sales fall in April compared to March? I’m sure they did.

Are you worrying about that?

Our shops are not. We have data.

Data that helps us maintain our perspective. And sustain our businesses.

 


Employment Population Ratio- Good News

April 18, 2017

The BLS’s Employment Population Ratio was 60.1 in March 2017, its first time back over 60% since February 2009.

February 2009!

This indicator actually shows what it purports to, unlike the U-3 (headline) Unemployment rate.

Not since February 2009…

The U-3 Unemployment rate may actually fall if workers give up looking for work, as the labor market falters. As the labor market is recovering,  the U-3 unemployment rate can rise because more people are re- entering the labor force as they start to look for work again.

The Employment-Population ratio, because it is unaffected by voluntary changes in labor force participation, is a useful indicator of current labor market conditions. Lows in the employment-to- population ratio correspond with economic downturns. The employment-to-population ratio holds clear and discernible implications for the labor market, both among and between segments of the population.

The Employment-Population ratio is a useful indicator. And currently, a positive one.

BLS Employment Population Ratio


Thank You to My Readers

April 12, 2017

Actually, a million thank yous! Thanks to readers like you, SPEAKINGOFPRECISIONBLOG has over 1,000,000 views.

1,000,000 views!

Our first post  was from June 30, 2009 and remains as relevant to day as it did then: 5 Reasons to choose a Career in Precision Machining

We’ve come quite a way since that very first post!

What do you like? 

Our post on The Difference Between Accuracy and Precision Measurement in Your Machine Shop is our most popular with 44,445 views.

Hardness vs. Hardenability- There is a Difference is our second most popular post at 35,780 views.

5 Facts About Manganese in Steel, 7 Causes for Quench Cracking of Steel, and Why Manufacturing is the Right Career Choice- DATA! all came in between 21,000 and 30,000 views each.

Average number of times a post gets seen on PMPASPEAKINGOFPRECISIONBLOG: 1048 times.

1,000,000 is an aspirational number. How many of us get to measure anything that we do in quantities of millions?  (Actually, all of our shops do, they call it “normal production!”)

But as an individual, as someone sharing knowledge and experience- 1,000,000 views;  1,000,000 shares of information; 1,000,000 human to human connections- that is an unexpected and very satisfying validation.

Thank you for spending a small part of your day with me here at my blog.

Together, we’ll continue to make sense of the the issues that make a difference to all of us in North American Manufacturing.

Especially Precision Machining.

1,000,000 views!

Do I believe in the power of social media to help us connect and share?

You bet I do! 1,000,000 times YES!

Tooting Own Horn  photo credit.


Being Bullish on Our Business is No Bull!

March 21, 2017

 

Being bullish on precision manufacturing is a logical conclusion from the strength of these just released economic indicators.

 

The data gives strength to the bull for precision manufacturing.

The PMPA Business Trends Report has a sentiment indicator for Sales for three months ahead. In January 2017, that indicator exploded, up 40% from December’s already optimistic number. (see the blue line on the chart below.)

Sentiment for sales up 40% since last report!

But don’t take our word for it. Here are 7 economic indicators released last week that are at multi year highs:

  • Consumer Price Index (CPI) up 2.8% year over year in February, up from 0.9% in July and at a pace not seen since February 2012;
  • Producer Price Index (PPI) up 2.2% year over year, Highest year over year rate since May 2014;
  • Manufacturing Production up 0.5% in February. Manufacturing Output is up 1.2% over the last 12 months, fastest pace since April 2015;
  • Housing Market Index  hit a 12 year high, its highest level since June 2005;
  • Housing starts rose 3.0% in February. Single Family housing starts jumped from 819,000 to 872,000 a pace unseen since October 2007;
  • Index of Consumer Sentiment from University of Michigan was close to January’s reading which was the best reading for this indicator in 13 years;
  • Retail sales were reported at 5.7 % just below January’s 6.0% year over year pace, highest since 2012.

The weight of the evidence is clear.

The weight of the evidence makes it difficult to be anything but bullish on our business prospects.

What are YOU doing to take advantage of the opportunities that this strong economy is providing for YOUR precision machining shop?

Data courtesy Chad Moutray Ph.D., CBE, Chief Economist at National Association of Manufacturers Monday Economic Report