Precision Machining Industry Sales Up 6.8% in 2017

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 mkirchenbauer@pmpa.org  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.

Photo credit

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Precision Machining Industry Shipments Surprisingly Strong in November

December 18, 2013

PMPA’s Business Trends Index for November 2013 is 116, down 10 points from last month’s value, yet at the highest value we recall for November. November is typically a slow sales month due to seasonal factors. The index is maintaining an average for calendar year 2013 of 122, and for trailing 12 months of 119.  November 2013 shipments are 113% of October 2012.

Strong industry shipments for November

Strong industry shipments for November

We are pleased to see that sales in November were above those in November 2012. While the last calendar quarter is historically weak for our shops, we have a nice tailwind of sales for the year to date at 122 average for the calendar year. With sales this strong in 4th quarter, we think that savvy shops will be lining up sourcing for the even stronger sales likely once we turn the calendar page to 2014. Have you been sharing expectations with your key suppliers?

Biggest surprise- 99% of responding companies expect employment in their shops to remain the same or increase!

Get our November PMPA Business Trends Report Here.


June ISM PMI Report-Resumption of Growth in Manufacturing

July 1, 2013

Good news/ bad news: Manufacturing growth resumes, but Employment shrinks in Manufacturing  for first time since September 2009…

“Manufacturing expanded in June as the PMI™ registered 50.9 percent, an increase of 1.9 percentage points when compared to May’s reading of 49 percent. June’s reading of 50.9 percent reflects the resumption of growth in the manufacturing sector for 2013, following the only month of contraction for the year in May.”- Bradley Holcomb, Chairman of the Institute for Supply Management Business Survey Committee.

Graph Courtesy Calculated Risk Blog

Graph Courtesy Calculated Risk Blog

Precision machined products are widely used key components used in a host of manufactured and durable goods. Precision machined products are a submarket of Fabricated Metals, which is tracked in this ISM Report on Manufacturing.

“A PMI™ in excess of 42.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the June PMI™ indicates growth for the 49th consecutive month in the overall economy, and indicates expansion in the manufacturing sector following one month of contraction. Holcomb stated, “The past relationship between the PMI™ and the overall economy indicates that the average PMI™ for January through June (51.5 percent) corresponds to a 2.9 percent increase in real gross domestic product (GDP) on an annualized basis. In addition, if the PMI™ for June (50.9 percent) is annualized, it corresponds to a 2.7 percent increase in real GDP annually.” (PMI™ stands for Purchasing Managers Index.)

ISM’s Production Index registered 53.4 percent in June, which is an increase of 4.8 percentage points when compared to the 48.6 percent reported in May.

How do your  June shipments compare to this benchmark?

The ISM report showed  11 industries reporting growth in production during the month of June — listed in order —  Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Furniture & Related Products; Paper Products; Nonmetallic Mineral Products; Wood Products; Fabricated Metal Products; Primary Metals; Petroleum & Coal Products; Food, Beverage & Tobacco Products; and Computer & Electronic Products. The three industries reporting a decrease in production in June are: Chemical Products; Machinery; and Transportation Equipment.

We are glad to see manufacturing back in growth mode, however, we were not pleased with this month’s first sign of contraction in employment.

ISM’s Employment Index registered 48.7 percent in June, which is 1.4 percentage points lower than the 50.1 percent reported in May. This month’s reading indicates contraction in employment for the first time since September 2009, when the index registered 47.8 percent. An Employment Index above 50.5 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.”

Dollars-2-donuts-image2

We are betting dollars to donuts (remember when there used to be a real difference between dollars and donuts?) that the  slowdown in hiring is related to employers’ concerns over Affordable Care Act.

Dollars to Donuts

Calculated Risk


Manufacturing Jobs: Separations vs. Hires

October 16, 2012

We like graphs because they tell the story without spin.

These trends are NOT being adequately discussed on the news.

Three out of three indicators agree, openings and hires are  down, while separations are increasing sharply.

The Bureau of Labor Statistics (BLS) reported that the number of manufacturing job openings dropped from 273,000 in July to 255,000 in August.

This is its lowest level since December 2011, with job postings declining for three straight months.

The other big headline for manufacturing is that net hiring turned negative. The BLS employment report  (link to NAM summary) showed that manufacturing jobs decreased in September for the second consecutive month.

In August, manufacturers hired 233,000 workers, down from 244,000 in July. This number is the lowest since June 2009.

At the same time, separations rose from 228,000 to 248,000. Separations include layoffs, quits and retirements.

This suggests net separations of 15,000 workers in August, a reversal of the net hiring of 16,000 observed in July.

So when you hear the rosy numbers from the media trying to “educate” you into thinking their way, why not ask them-

“Can I have a graph with that?”

“I’d like a Graph with that.”

Fast Food Worker Photo

Graph Courtesy of Chad Moutray, Chief Economist at NAM.