February 2, 2011
Forgive us if our schizophrenia is showing. Precision Machined Products shops serve Manufacturing and Construction markets.
Good News - Bad News.
According to the latest ISM Purchasing Managers Report, the US manufacturing sector grew at its fastest pace in almost seven years in January.
The ISM Manufacturing rose to 60.8, the highest reading we can recall since we started paying attentionto this index. It hasn’t been this high since May 2004. With success comes a new set of problems-according to the ISM report, “No commodities are reported down in price.”
Aluminum, Brass, Copper, Stainless Steel, Steel, and Steel Surcharges all reported “Up in Price.”
Now for the not so good news.
On Tuesday, the US Commerce Department posted its latest figures on construction spending.
"We are here..."
According to the report, US construction spending dropped to an annual rate of approximately $787.9 Billion- the lowest since July 2000.
Another data point confirming the “lost decade.”
Good News Bad News Photo Credit
Abandoned Construction Photo credit
April 21, 2010
The PMPA Business Trends Index of Sales for March 2010 reached the 100 mark.
This is auspicious because that 100 value means that our sales level in March 2010 is essentially the same as our average sales for the year 2000, which is the base year (2000=100) for our index calculation.
Finally back to 2000 sales levels in March of 2010.
We have lost a decade!
Hooray- because we are up 36 points from the low of May 2009 at 64.
Hooray- because we are achieving those year 2000 sales numbers with the lessons we learned during the lost decade: lean operations, lean setups, cellular operations. Working smarter. Maximizing use of our equipment’s capability. Tapping the ingenuity of our savvy employees.
Here is our narrative from the March Business Trends Report
Now, about that Lost Decade:
During the lost decade, we learned which jobs we could do where we added sufficient value to be the manufacturer. And which jobs were of so little value added that they would inevitably be made in low cost economies.
During the lost decade, I think we also learned the lesson that some customers are bullies and not profitable- more difficulties than they are worth.
And as we continue our lunge to profitability, I am seeing many signs that our industry knows what to do with those customers.
Arrogant demands get their due.