Ignore the Hysteria- December ISM PMI is a Positive Indicator

January 4, 2019

Contrary to the negative descriptions of many of the headline writers, the December ISM PMI index came in UP 0.6% from its 5-year average for December from 2013-2017, indicating growth in the Manufacturing sector in December, and in the broader economy.

How bad are those headlines? Sheeeesh!

How about

Bad ISM gives huge push in US T’s back

or :

US Factory Gauge Tumbles by Most Since 2008.

Nothing like calling up the ghost of recessions past. Recession must be imminent, right?

Now before analyzing these incredibly pessimistic headlines, let us state a couple of Facts.

Fact 1) The December 2018  ISM PMI was actually 54.1 and indicated continued economic expansion;

Fact 2) The average December ISM PMI for the five years of 2013-2017 was 53.4;Fact 3) The December 2018 ISM PMI came in actually 0.6 points ABOVE THE FIVE YEAR AVERAGE!

Fact 4) When the ISM PMI fell in September of 2008 to 38.9 in October of 2008, the index was already in negative territory-below 50.

Truth be told, the December 2018 ISM PMI continued to indicate “expansion in the manufacturing sector in December and in the general economy For the 116th consecutive month. ISM

How is that bad news?

While the numeric value of the drop  was the “largest” since 2008- the fact that the index remained in positive economic expansion is ignored in the headline- leaving the reader to ponder the scary connection to the Great Recession of 2008.

The 5-year average for December was 53.4. Why all the weeping and gnashing of teeth?

Here’s my headline- December ISM PMI  index at 54.1 remains solidly positive indicating continued expansion.

Economic expansion in the Manufacturing sector -just above the average for the past five December’s- and the 116th consecutive month of expansion in the broad economy. We see it as good news for the season! We think that you should too!

 


2018-On Track to a Strong Finish for Precision Machining

December 20, 2018

With 80 companies responding, the PMPA Business Trends Index for November 2018 declined 11 points to 130,
which was (still) an all-time high for the month of November! Shops reporting sales declines outnumbered those reporting
gains by a ratio of 4:1- not at all unexpected considering the seasonality of shipments this time of year. The Business Trends
Sales Index remains on track to close the year up 8% over 2017.“- PMPA Business Trends Report for November 2018

Though down eleven points from October’s high, PMPA’s November Business Trends Index remains unseasonably strong.

Outlook for next three months:

  • Net Sales: The sales outlook resumes positive expectations for the next three months despite seasonal
    factors.
  • Lead Times: Eighty- six percent of respondents expect lead times to remain the same or increase in the
    next three months.
  •  Employment: Prospects for employment continue to be positive with ninety-seven percent (97%) expecting
    level or increased opportunities for employment.
  • Profitability: Eighty-five percent of our respondents expect business and margins to remain strong for the
    next three months, just a slight decline from the prior month.

In our April report we forecast that our index of sales would finish the year at 135, up 8% over calendar year 2017. As of this November report, we are at 135, up 8 percent over 2017 with just one month to go.

How is your shop’s performance compared to last year?


OSHA Inspections 2018 YTD Precision Machining Industry

October 22, 2018

OSHA is still fulfilling its mission promoting worker and workplace safety. Safety, Amputations, and Planned Inspections led the OSHA inspection categories for NAICS 332721 so far this year.

At PMPA we take a look twice a week at the OSHA inspections posted online for our industry. In the event that one of our members is on that list, we call immediately to offer our assistance. If it is a non-member, we look to learn what vulnerabilities are being encountered in the industry shops not belonging to PMPA.

Here’s what we found out.

So far this year, OSHA has posted notices of 53  inspections for our NAICS code- 332721 online. 53!

Chart of OSHA inspections frequency for 2018 NAICS 332721 Precision Machining Shops

 

The single largest category were for “Safety” – 15 of 53, 28% of all inspections posted.

Go figure.

The second most frequent category was “Amputations“-12 of 53, 23%.

This really is aggravating. There is no excuse for anyone to be losing body parts. We need to contact our people immediately to review the basics about pinchpoints, rotating equipment, and the pointlessness of trying to stop a lathe with our fingers or thumb. 

I won’t display the photos but if you want to see what a drill can do to a human hand click this link:  Graphic Image

Programmed (planned ) Inspections were third  with 7 of 53 or 13%. Routine enforcement is still a “real thing” at OSHA.

Complaints  came in at fourth  with 4 out of 53 inspections being initiated as a result of a complaint- 8% of inspections due to complaints..

Health tied with Complaints at 4 inspections out of 53- 8% of inspections due to occupational health concerns

Rounding out the ten causes were Noise, Reinspections, Accidents, Referrals, and Inspections.

Reasons cited for OSHA Inspections for NAICS 332721 (frequency) Calendar year 2018 YTD

 

OSHA is still fulfilling its mission promoting worker and workplace safety. The above reasons show how your peers are being examined. Are you ready for an OSHA inspection?

Photocredit: Mystalk

Data and Chart Preparation credit Veronica Hopson, PMPA

Original Data sourced from USDOL OSHA.


Performer Day- Its About Performance, Not Labor

September 3, 2018

I compile the annual wage survey for the precision machining industry, and my sample is a nice slice of industry shops.

We don’t have any labor jobs in our shop hourly wage survey.

None.

Nada.

Zip!

Zero!

On the other hand, the jobs that we do have are all jobs requiring high levels of process ownership and personal performance.

Think of all of the aspects of our jobs- the tools, the offsets, the relationships between datums, the materials, the gages, the chips and their control, the coolants, the controls, the software code- and suddenly being a machinist looks a lot like being a Performer:

Almost as much stuff to keep track of as we have as machinists!

So today, I’m going to cue up a Neil Peart video on Youtube as an appreciative salute to the music made  on our production machines under the watchful practice of our skilled performers.

I’m not celebrating Labor Day.

But I am certainly going to  use the time to appreciate the performers in our shops who make things that make a difference.

Happy Performers Day.

Photo credit 

More info about the Human Performance System Approach to understanding our shops

Neil Peart photo


Why Precision Machining Matters- Lothar Horn

August 31, 2018

I am always pleased when I encounter a quote that neatly communicates an Idea that I firmly believe, but is expressed more clearly than I could.

Imagine my delight when I received a placard containing one of my favorite industry quotes today!

So happy to get this visual reminder of the importance of precision machining, and the tools that we use!

Read the Card!”

“Read the card!”

“What’s it say?

NO CAR RUNS, NO AIRCRAFT FLIES AND NO HIP REPLACEMENT IS FITTED BY A DOCTOR WITHOUT PRECISION TOOLS HAVING PREVIOUSLY BEEN IN USE.”

As precision machinist’s, we’re the people that make things.

Things that make a difference in everyone’s quality of life.

And who is is it that makes the tools that help us make that difference?

Why, precision toolmakers, of course.

A big thank you to Horn USA for sharing the placard with my favorite quote.

See you all at IMTS!

 


Precision Machining Sales Take a Breather – at a Record Level- in July

August 23, 2018

First the good news:

The 2018 July index of 128 is 14.3% higher than July 2017’s 112 value.   Our year to date average is 135, up 10 points or 8.0% over 2017’s year-end average of 125. We are at 107% year to date.

Jul;y 2018 Business Trends Index- Highest July EVER!

And the not so good news?

Well actually it is just that  to get to that record high Sales for July, the Index actually dropped 10 points or about 7.3%. from 138 in May & June to 128 in July.

I’m calling it a breather from the feverish year we’ve had so far.

Hours of first shift scheduled dropped by half an hour, a welcome break for the folks in the shop.

Why we’re not concerned about the decline of Sales in July:

The forward looking sentiment for Sales for the next three months actually climbed in July. while all other indicators remained steady.

We’re just taking a bit of a breather.

A much needed break for our shops.

Enjoy!

Photocredit: Skynews


Steel Tariffs- HIGHER PRICES!

July 30, 2018

Prices for Hot Roll Steel Band in the US U.S. are $465 higher than in China (compared to $471 in the last report two weeks ago), and $358 higher than in the EU (compared to $372 in the last report).

$465 higher than China; $358 higher than EU.

Steel in the US is 76% more expensive than in China.

Steel in the US is 49% more expensive than in the EU.

How’s steel profits?

Steel Dynamics Joins Nucor – Doubling Profits.

The next time somebody says “National Security” I am seriously gonna lose my cool!

Section 232 tariffs are for national security.Yeah right.

 

Price information courtesy Steel Benchmarker.