May 1, 2018
Despite a drop of two points from 59.3 to 57.3, the April Institute for Supply Management Purchasing Managers Index (ISM-PMI) indicated continued solid, but slowing growth in the manufacturing sector. Of the 18 Manufacturing Industries, 17 reported growth in April. Demand remains robust, but the nation’s employment and supply chains continue to struggle- April 2018 ISM PMI, Timothy Fiore, Chair, ISM Manufacturing Business Survey Committee.
The April report noted declines in other indexes such as New Orders (down 2 points); Production Index (down 3.8 points); New Orders down 0.7 points); and he Employment index (down 3.1 points) compared to March. Prices index was up 1.2 percent from prior month, indicating the 26th consecutive month of gains.
The prices index is currently at its highest value since April 2011; 17 of 18 industry sectors reported price increases.
108th consecutive month of expansion for the overall economy according to ISM PMI for Manufacturing.
What is going on in manufacturing? Here are a couple of comments from some of the ISM’s respondents:
- “Business is off the charts. This is causing many collateral issues: a tightening supply chain market and longer lead times. Subcontractors are trading capacity up, leading to a bidding war for the marginal capacity. Labor remains tight and getting tighter.”
- “[The] 232 and 301 tariffs are very concerning. Business planning is at a standstill until they are resolved. Significant amount of manpower [on planning and the like] being expended on these issues.”
- “The recent steel tariffs have made it difficult to source material, and we have had to eliminate two products due to availability and cost of raw material.
PMPA’s March Business Trends Report just came in and showed a record high at 143 for sales. We look forward to seeing what our April report has in store.
Chart courtesy Calculated Risk Blog
ISM April PMI Report
April 27, 2018
“With 91 companies responding, the PMPA Business Trends Index for March 2018 increased 14 points or 10.8% over
February to 143, the highest value for the Business Trends Index EVER! At 143, the index is up 11.2 points or 8.5%
above the five-year average for the March sales index of 131.8. ” – PMPA March 2018 Business Trends Report
All time high for Our Sales Index!
Sentiment indicators from our respondents remained high. PMPA members can get the full report here. Press can request a copy – we’ll be happy to share.
Two of three months in 2018 have set new records for sales. Our industry is outperforming five year averages by wide margins- up 8.5% for March.
Prospects for employment remain high in our shops, even as the national figures tout “full employment.”
If you know someone that is underemployed, or unemployed, the prospects for great careers in our precision manufacturing shops have really never looked better.
March 2018 PMPA Business Trends Report
February 6, 2018
Autonomy in our technology is real! (Photo courtesy Joshua Andrade- Heinlein Forum on Facebook)
I was privileged to be able to witness the live cast of the Falcon Heavy Lift vehicle today. The photo above shows two booster engine modules simultaneously and autonomously landing. This was just a small part of the technology displayed today by the Falcon Heavy launch.
But here is why I say that a new era starts today:
- This is proof that Autonomy in our technology is real. It’s no longer about listening to a reporter somewhere talking about autonomous cars on test tracks. We got to see it ourselves today. It works. Now, it’s just a matter of scaling and networking the technology. We’ll be seeing this in our customers products sooner than we expected.
- Private enterprise for the win. NASA’s Bill Gerstenmaier, Associate Administrator for Human Exploration and Operations said that “the NASA SLS (Space Launch System) heavy rocket would cost about $1 billion per launch.” The Falcon Heavy cost is about $90 million per Launch. That’s about $910,000,000 in unneeded taxes per launch.
- Today’s launch has proven that the existential joy of engineering is alive and well and making cost effective technology in private enterprise. Space is no longer limited to staid, bureaucratic, rationalizations that it is for research for the common good missions. Today, it is about the human spirit and what we can achieve.
- This was not cobbled together by the lowest bidder with a bunch of imported parts. Although the label on a circuit board proudly proclaims “*Made on Earth by humans” this is validation of the capability of US private enterprise, engineering, and the entrepreneurial equivalent of the gold record on Voyager.
- This is the defining event of the new renaissance of Engineering, Entrpreneurialism, and Manufacturing to further mankind’s material progress. Through our own capable efforts.
Made on Earth by humans (Photo courtesy Joshua Andrade)
I am glad to be a witness to this milestone in the renaissance of manufacturing, engineering, and entrepreneurial accomplishment here in America today. An electric car, is on its way to Mars. I watched two booster engines land themselves simultaneously. I watched the joy of the engineers as their work accomplished its demonstration of the power of our technology. This is the current generation’s SPUTNIK moment.
Baby boomers can just barely remember what Sputnik did to transform for our culture, but many of us chose science and engineering and technology careers. Today, we all had the chance to see a similar watershed for technology, manufacturing, and entrepreneurial spirit, and that it is cool again.
Existential Joy of Engineering- Why shouldn’t we love what we do?
The existential joy of engineering is alive and well, and it has just sent a red car hurtling towards a rendezvous with the red planet.
Red car to rendezvous with a red planet
…to be continued
Link to video Space X Falcon Heavy Launch– start at 4:14:24 to start with the launch
Photocredits: for Landing and Circuit board: Joshua Andrade (J Meauho Andrade on Facebook)
February 1, 2018
Positive indicators for our precision machining shops from ISM and PMPA.
According to today’s release of the January 2018 Institute for Supply Management -Purchasing Manager’s Index, economic activity in the manufacturing sector expanded in January, although at a slower rate than in December 2017. The January PMI came in at 59.1%, down 0.2% from 59.3% in December.
Continued strength in Manufacturing according to the nation’s Purchasing Managers at the Institute for Supply Management.
A reading above 50 percent in the PMI indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
While the ISM-PMI report highlighted slight declines in the following indicators for our manufacturing businesses, they still bode well for manufacturing’s strength:
- The New Orders Index registered 65.4 percent, a decrease of 2 percentage points from the seasonally adjusted December reading of 67.4 percent.
- The Production Index registered 64.5 percent, a 0.7 percentage point decrease compared to the seasonally adjusted December reading of 65.2 percent.
- The Employment Index registered 54.2 percent, a decrease of 3.9 percentage points from the seasonally adjusted December reading of 58.1 percent. The Supplier Deliveries Index registered 59.1 percent, a 1.9 percentage point increase from the seasonally adjusted December reading of 57.2 percent.
Other comments from this report that convey positivity for our sector including “expanding business conditions, with new orders and production maintaining high levels of expansion; employment expanding at a slower rate; order backlogs expanding at a faster rate; and export orders and imports continuing to grow faster in January. Supplier deliveries continued to slow (improving) at a faster rate. Price increases occurred across all industry sectors. The Customers’ Inventories Index indicates levels are still too low. Capital expenditure lead times increased 8 percent during the month of January.” These all signal that manufacturing continues to be very busy up and down the supply chain. The “Customer’s inventories being too low,” comment tells me that there will continue to be strength in demand for manufactured goods in the coming months.
PMPA’s own Business Trends Report for December 2017 and year end summary reported that our companies’ sales were up 6.8% over calendar year 2016’s levels. This January ISM PMI report continues the positive outlook for manufacturing. PMPA Year End Summary Blog Post
ISM Press Release
Calculated Risk Chart of January 2018 ISM PMI
January 25, 2018
Our December PMPA Business Trends Report for December 2017 finished at 125 for the year, up 6.8% over last year’s 117.
It has been a great year for our precision machining shops, and “Busy” is the watchword.
Our industry sales increased over twice the US GDP growth reported by BEA for 2017!
Our sentiment indicators for the year ahead were positive as well.
PMPA members can read the full report here
By the way, we predicted in May that our year end sales level would be 126.25- an error of just 1.25% from the actual value of 125!
Press representatives desiring a copy of the report please contact email@example.com to get a copy of the full report or to arrange an interview.
We are confident that 2018 will be a similarly strong year for our industry- starting in 1st quarter where our indicators are all strongly positive.-Net Sales, Lead Times, Employment and Profitability.
December 4, 2017
The Institute for Supply Management last week reported that “The November PMI® registered 58.2 percent, a decrease of 0.5 percentage point from the October reading of 58.7 percent. “ This value means that “Economic activity in the manufacturing sector expanded in November, and the overall economy grew for the 102nd consecutive month.”
We’d like to provide a wee bit of sensemaking to this report- as normally people would think that a decline in the index is not a positive thing.
- The decline is just 0.5 point- which means that this November reading is higher than every other monthly reading this year except for October and September. Can you say “unseasonably high?”
- That decline is also higher than 45 of the last 50 readings, going back to October 2013. Do you agree with us that the data indicates that “the process has shifted.”
- The absolute values of the index are consistent with Economic activity in the manufacturing sector expanding as well as growth in the overall economy.
Here’s the chart, courtesy of Calculated Risk Blog
November value remains above most historical values since the end of the great recession, despite seasonality.
We took the liberty of running the ISM PMI averages for January through November for 2014, 2015, 2016- they came in at 55.84, 51.67, 51.22; together, they average 52.91.
The 2017 January-November average for the ISM PMI is 57.38.
We believe that the data is clear that the process has shifted, in a positive direction. Up 4.47 points 98.4%) over the average for the same period for the last three years.
Manufacturing in the United States is performing substantially better than it has over the past three years, and we believe that is is not an anomaly.
ISM PMI November Announcement