October ISM PMI Report Manufacturing Positive

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.

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/

 

 

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http://www.calculatedriskblog.com


Industry Sales Stronger Than Expected- PMPA Business Trends

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.

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.    

Link


Manufacturing Activity Up in September- ISM PMI Report

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

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


PMPA Business Trends Index Recovers 10 Points in August

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.

aug16-bt

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.”

 


Documenting the Impact of Federal Regulations- NAM

September 22, 2016

A new study commissioned by the National Association of Manufacturers  (NAM) reveals the true cost of this administration’s Labor regulations.

  • $81.6 billion in compliance costs over the next 10 years
  • 155,700 lost jobs 
  • 411 million hours of paperwork

No argument from us about the hours to complete paperwork!

nam-cost-of-regulations-2016

Obviously, management time spent on regulatory compliance that is overly cumbersome and redundant is time that management is not adding value to help companies become more competitive, sustainable, and add higher value.

Keep in mind, this is just Dept. of Labor costs.

Full Study here: NAM Report


Precision Machined Parts Sales Plummet in July

August 26, 2016

The Witch of November came early to the Precision Machined Products industry as our Business Trends Sales Index dropped 21 points from June to July. the July figure of 108 is the Average for November for the past 4 years, hence the Gordon Lightfoot lyric.

Second largest monthly drop since the recovery began...

Second largest monthly drop we can recall…

With 82 companies responding, the PMPA Business Trends Index in July 2016 dropped 21 points from 129 to 108, the second largest drop we can recall.  (It fell from 131 to 109 a drop of 22 points from October to November 2014.)  That 108 value just happens to be the Average Index Value for November for the past four years, and is far below any of the past four years’ July values, which averaged ten points higher at 118.  Over sixty percent of this month’s respondents reported double-digit sales declines from June to July.

We are reminded of Gordon Lightfoot’s verses about “the witch of November coming early,” as the “sales bell rang ‘21 times’” – once for each lost point of sales index lost compared to June.  Last month’s report showed pessimistic outlook for sales, and with this July report that came to pass.  While this level of volatility is striking, our shops continue to manage this well.

Silver Lining Department: Outlook for Employment prospects in July remained level with 64 respondents (79%) expecting prospects to remain level; seven (9%) expecting them to decline, and ten (12%) expecting an increase. The fact is  that 91% of shops expect employment prospects to remain the same or increase in our shops.

 

 


Ten Points Worth Sharing- Cleveland Area OSHA Director Howie Eberts

August 25, 2016

We attended a presentation at WIRE-Net by Cleveland OSHA Area Director Howie Eberts. Howie did a great job of giving attendees a thoughtful, human view of how and why OSHA does what it does in his district.

Informative slides were the foundation of his talk, but the takeaways revealed some interesting insights into our joint  (Companies and OSHA) efforts toward employee safety.

We all have shared responsibility for safety.

We all have shared responsibility for safety.

1)      Safety is important- not just for ourselves, but also for our families that are counting on us.

2)      On the job fatalities have declined substantially from 1974 to the present- but there are still too many.

3)      Most OSHA inspections are conducted without notice.

4)      In Cleveland region, 85% of inspections are a result of employee complaints.

5)      Be very careful posting photos on your websites or literature- If someone is obviously in the shop without wearing their required PPE…

6)      It‘s your company-

  • Why wouldn’t you want to have a prepared written plan for how your company will respond to a serious injury or fatality?
  • It’s not unreasonable to assert your rights
  • You DESERVE to be treated with respect
  • So do our Field Agents
  • How you treat our officers is on you

7)      OSHA does have the right to interview your employees privately

8)      To prove employee misconduct you need to prove all four:

  • You have a work rule
  • The rule is communicated to all employees
  • You monitor compliance
  • You issue discipline for noncompliance

9) If the agent tries to expand the scope and you don’t understand why, ask them to clarify why, if you still don’t understand, ask to speak with Howie

10) The facts show that the most dangerous thing that any of us do involves a motor vehicle; roadway incidents alone accounted for nearly one out of every four fatal work injuries.

We took a number of specific actionable tips and insights away from his presentation that we’ll be sharing exclusively with our PMPA members.

Photo credit: http://www.medinacountysafetycouncil.com/

Wire-Net: https://www.wire-net.org/