November 30, 2016
With 84 companies responding, the PMPA Business Trends Index in October 2016 declined 1.7% to 116 from 118, virtually identical to its movement from September to October last year (when it fell from 121 to 119- a 1.6% drop.) Our Index Average year to date is 119, down just 2 points from last year’s calendar year average of 121. Twenty-two percent (22%) of our respondents reported sales increases in October, thirty-one percent (31%) reported sales decreases, remainder reported no change.
Modest change in sales at same magnitude as last year same report.
Meanwhile, the Fed reported that Industrial Production was unchanged from September to October, while the manufacturing output component increased 0.2 percent. The Fed estimates capacity utilization at 75.3%, down 4.7% from its long run (1972-2015) average.
The October 2016 PMPA Business Trends Report shows that our responding shops continue to perform somewhat better than expected, down not quite two percent (1.7%) from last month. The 3 month moving average has turned up, but remains below the 12 month moving average as we report the first month of the seasonally slow fourth quarter. The Average Sales for the Industry remains within a couple of points of last year’s calendar year average, and our 119 YTD is “essentially even” with the performance of our shops in CY 2014 and 2015. October Lead Time sentiment suggests that our shops expect sales to be stronger than the Sales Indicator alone shows. Our indicators this month justify our optimism about the markets and employment prospects for our precision machining industry.
Members can see full report Here.
November 14, 2016
PMPA is proud to be partnering with NIMS, to help companies find new ways to help students and workers gain skills for success.
Apprenticeships to build a pipeline of skilled professionals for a great manufacturing career.
The National Institute for Metalworking Skills (NIMS) has been selected by the U.S.Department of Labor as an industry intermediary to support the expansion of registered apprenticeships within MANUFACTURING. The Precision Machined Products Association (PMPA) a founding stakeholder member of NIMS, will work with NIMS to increase access to apprenticeships and assist employers in developing new programs that reach diverse talent pools among our membership. As part of this initiative, $500,000 is available to support companies in establishing a registered apprenticeship program with the Department of Labor.
“For over two decades, NIMS has worked with companies, workforce development groups and community colleges to stand-up high-caliber apprenticeship programs across the country,” said Jim Wall, Executive Director, NIMS. “This contract gives us the unique opportunity to create more impact in our industry by expanding apprenticeships to underrepresented populations and to new companies looking to establish a sustainable talent pipeline.”
What’s in it for your company? NIMS will focus on providing companies with tools and resources to develop customized registered apprenticeship programs. These programs combine on-the-job training with job-related classroom instruction and meet national standards for registration with the Department of Labor or State Apprenticeship Agencies. PMPA is working with NIMS to help facilitate the creation of registered apprenticeships for our member companies.
If you are interested in enhancing your talent pipeline through apprenticeships, this program may be for you.
Companies that are interested in building an apprenticeship program or organizations that are interested in partnering with NIMS should contact Sterling Gill firstname.lastname@example.org; for more information go to www.mfgapprenticeship.com or email the NIMS ApprenticeshipUSA team at email@example.com.
November 1, 2016
“The October PMI® registered 51.9 percent, an increase of 0.4 percentage point from the September reading of 51.5 percent… The Employment Index registered 52.9 percent, an increase of 3.2 percentage points from the September reading of 49.7 percent.”- ISM Spokesman Bradley J. Holcomb.
We were pleased to see the strong increase in the Employment Index, which agrees with PMPA’s Employment sentiment indicator which was reported to be above 95% for September.
Positive showing for manufacturing and employment in October 2016.
Link to full ISM Report: https://www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1
Chart courtesy of Calculated Risk Blog: http://www.calculatedriskblog.com/
October 28, 2016
With 85 companies responding, the PMPA Business Trends Index in September 2016 remained even with August at 118, up ten points from the year’s low in July and up 4 points from the average for September for the past four years which was 114. Last year’s September Sales index was 119, so we are down just one point from last year for September, and down just two points from the 2015 calendar year average of 121.
Even with August and 4 points above last four September’s Index average.
Opinions for the next three months compared to today:
- Net Sales: The Sales Outlook remains level despite our approach into the usually lower sales months of the fourth quarter.
- Lead Times: Overall outlook for Lead Times dropped considerably in this report, signaling open capacity foreseen in the next three months.
- Employment: Prospects for employment are positive with NINETY-SIX PERCENT (96%) expecting level or increased opportunities for employment.
- Profitability: Overall sentiment for profitability has remained level since May.
October 3, 2016
“Economic activity in the manufacturing sector expanded in September following one month of contraction in August, and the overall economy grew for the 88th consecutive month” according to the latest Institute for Supply Management Purchasing Manager’s Index Report. September ISM PMI
Up 2.1 percent points and indicates economic growth for Manufacturing sector at 51.5
Our look this month at the ISM PMI release for September is positive for our precision machining shops, for manufacturing, and for the broader US Economy.
- The ISM’s New Order Index increase of 6 percentage points bodes well for our shops going forward.
- The increase in the PMI back to expansion for manufacturing is a positive,
- This is the 88th consecutive month of expansion in the broader economy according to this report.
According to Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:
“The September PMI® registered 51.5 percent, an increase of 2.1 percentage points from the August reading of 49.4 percent. The New Orders Index registered 55.1 percent, an increase of 6 percentage points from the August reading of 49.1 percent. The Production Index registered 52.8 percent, 3.2 percentage points higher than the August reading of 49.6 percent. The Employment Index registered 49.7 percent, an increase of 1.4 percentage points from the August reading of 48.3 percent. “
The increase of 2.1 percentage points in the ISM PMI over August beat analyst’s expectations of 50.3 and shows manufacturing back in expansion mode. In a Wall Street Journal poll, published prior to the ISM release, economists estimated that the ISM reading would increase to 49.7 from 49.4 the month before- showing manufacturing still in contraction mode.
We’re glad the data beat the estimates!
Our shops have been seeing extreme volatility in sales as reported in our PMPA Business Trends Report for August. this September report is positive for precision machining.
Chart courtesy Calculated Risk Blog
September 27, 2016
With 83 companies responding, the PMPA Business Trends Index in August 2016 recovered 10 points from July’s 108, to 118, the same value that we had in August 2014 and 2015.
Our index for the year to date has recovered to 120, the same value as 2014, and one point lower than last year’s 121. Over one eighth of this month’s respondents reported sales increases greater than 50%- we checked with all of them to confirm. Our takeaway-a lot of slow pay-no pay customers in July caught up in August. Our report asks for sales dollars, not parts shipped.
The August 2016 PMPA Business Trends Report shows that our responding shops returned to trend in August, mirroring sales performance of the same month in both 2015 and 2014. With one eighth of our respondents logging sales increases at 50% or more, our calls to confirm uncovered that perhaps the July numbers were down because customers of our shops had not paid their bills, rather than the weak numbers representing poor shipments performance. With the 3 month moving average remaining below the 12 month moving average, there is room to improve and reason to be cautious (particularly about our accounts receivable!). However, we are within a point of last year’s calendar year average, and at 120 YTD, we are even with the performance of our shops in CY 2014. The recovery to 118, typical August performance, is a good sign that despite the volatility, our shops are managing well.
Best news: Employment Sentiment!
“Prospects for employment are positive with NINETY-SIX PERCENT expecting level or increased opportunities for employment.”