June 2017 Business Trends Report- Strong Sales of Precision Machined Products

July 26, 2017

“With 79 companies responding, the PMPA Business Trends Index for June 2017 increased 5 points or 3.8% from
May’s 130 to 135. This is the strongest level of shipments that we have seen in June, prior highs for June were 128 in 2015
and 2016.  We continue to be optimistic for a strong performance for the industry for the balance of the year.”

This is what very strong shipments look like. 158 Kg man pulls 30 ton C-130 Aircraft.

The FED’s Industrial Production (IP) Index rose 0.4 percent in June for its fifth consecutive monthly increase.
Manufacturing output rose at an annual rate of 1.4 percent, a slightly slower increase than in the first quarter.

At 105.2 percent of its 2012 average, total industrial production in June was 2.0 percent above its  year-earlier level.

The strength of our PMPA Business Trends Sales Index compared to that of the FED IP Indicator suggests that Industrial Production will continue to rise as companies use the products that we have shipped in excess of the IP demand in June.

We remain positive for industry prospects, and note that our Sales Index is up almost 10% over last year’s full year average.

PMPA members can find the PMPA Business Trends Report HERE.

Photo  Credit

Photo backstory


Strong ISM PMI Report for June 2017

July 3, 2017

A strong ISM Report for June: The PMI Index increased 2.9 percent,  New Orders Index up 4 percent, Production Index up 5.3 percent, and the Employment Index was up 3.7 percent over May. 

Manufacturing in June went something like this.

Timothy R. Fiore, Chairman of ISM Manufacturing Business Survey Committee released this statement:

 “The June PMI® registered 57.8 percent, an increase of 2.9 percentage points from the May reading of 54.9 percent. The New Orders Index registered 63.5 percent, an increase of 4 percentage points from the May reading of 59.5 percent. The Production Index registered 62.4 percent, a 5.3 percentage point increase compared to the May reading of 57.1 percent. The Employment Index registered 57.2 percent, an increase of 3.7 percentage points from the May reading of 53.5 percent… Comments from the panel generally reflect expanding business conditions; with new orders, production, employment, backlog and exports all growing in June compared to May and with supplier deliveries and inventories struggling to keep up with the production pace.”

The consensus for the ISM PMI was to be up slightly at 55.1; the 57.8 actual index strongly outperformed analyst expectations.

That out-performance also aligned with the sentiment indicators from PMPA’s own Business Trends Report from May which had 82% of respondents expecting sales of precision machined products  to remain level or increase…

Here is the long term  ISM PMI graph courtesy of the Calculated Risk Blog

“Economic activity in the manufacturing sector expanded in June, and the overall economy grew for the 97th consecutive month.”- ISM

We continue to remain optimistic about career opportunities in Precision Machining. The ISM numbers showed employment growth up 3.7% for manufacturing in June.

Strong Athlete Lifting Photo courtesy The Athlete Daily.

ISM Data 

Calculated Risk Blog


OSHA Finally Clarifies Online Injury and Illness Reporting Rule

June 30, 2017

 

“The U.S. Department of Labor’s Occupational Safety and Health Administration today proposed a delay in the electronic reporting compliance date of the rule, Improve Tracking of Workplace Injuries and Illnesses, from July 1, 2017, to Dec. 1, 2017. The proposed delay will allow OSHA an opportunity to further review and consider the rule.

The agency published the final rule on May 12, 2016, and has determined that a further delay of the compliance date is appropriate for the purpose of additional review into questions of law and policy.  The delay will also allow OSHA to provide employers the same four-month window for submitting data that the original rule would have provided.“- OSHA NEWS RELEASE

PMPA noticed an unannounced posting on the OSHA website which we captured and shared with our members May 31:

On June 27, OSHA issued a news release quoted above.

While it took OSHA 27 days to issue a news release AFTER we noticed their website posting, they are offering the public only until July 13, 2017 to provide comments.

Here are some bullet points from our testimony back on January 9, 2014:

  • OSHA has not provided any reasons to show how making this previously confidential information public will advance worker safety;
  • OSHA has shown no public purpose to justify the increase in the reporting frequency to quarterly;
  • The creation of quarterly reporting merely provides OSHA with another means to find employers to be not in compliance with yet another paperwork requirement;
  • The proposal removes the presumption of privacy rights from the employer and employees whose data and information would be reported;
  • We disagree with the presumption of this proposal that data shared for statistical and regulatory purposes should be broadly disseminated and made publiclly available to third parties who have no regulatory need for that data;
  • Employers are mandated by the federal government to protect the privacy of health related information of employees in our records, yet OSHA will use this rule to publicize to the world the injury or illness status of our employees;
  • But most seriously, the way that this proposal has been explained places the credibility of OSHA on the line: telling employers that“The proposal does not add any new requirement to keep records, it only modifies an employer’s obligation to transmit these records to OSHA”  is disingenuous at best when the proposal in fact removes the privacy of the employers’ data and changes its status from confidential to publically accessible. Telling us that ‘nothing has changed,’ when in fact the agency’s intent is to remove privacy status of employer reported information and publish those details online is not telling the whole truth.

We’ll be reiterating these and some additional points in our comments, but by all means, feel free to weigh in on your own.

Try this link Injury and Illness Comments

Is public shaming of employers is the REAL agenda, or is it just about using the power of regulatory agencies to bully? What is the regulatory need for public online posting? No one will be any safer because these records are posted on the internet.

Department of Employer Shaming


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.