Is the stock market truly something we want to use as a measuring stick for overall economic health in the U.S.? On Aug. 17 market watchers voiced some pleasure that production in U.S. factories, mines, and utilities increased 0.9 percent, according to the Federal Reserve in Washington. The increase was almost double the median forecast of economists surveyed by Bloomberg News and represented the biggest gain of the year. On Aug. 18 that news was quickly forgotten as the Philadelphia Federal Reserve reported a drop in factory activity for the Mid-Atlantic region—actually the lowest level for the region since March 2009. I guess one region speaks for the entire U.S. manufacturing community.
Posts Tagged ‘Fabricating’
By: Dan Davis
I'm working on our FAB 40 editorial feature for June. It's a collection of 40 metal fabricating companies that have submitted to us their revenue figures for 2010, projected revenue for 2011, and outlook for this year. The listing provides a great snapshot of the overall health of the fabricating industry.
To no one's great surprise, fabricators believe that 2011 is shaping up to be a pretty good year, even in the face of rising steel prices and international turmoil. As several fabricators have told me, when you come from the depths of 2009, you have no choice but to believe things are looking up.
Amidst the positive feelings and cautious optimism, a couple of fabricators noted how they currently are working on jobs that previously were outsourced to China. One fabricator actually called the jobs part of a "trend" and included that work as part of the reason his company will see a 15 percent increase in sales for 2011. Another fabricator called his store fixture business a "growing segment" because of all the jobs coming back from China. (more...)
By: Vicki Bell
On a recent trip to the Washington D.C. area, my husband and I took the American Spirit Monument Tour. With only a little time for sightseeing, we had to choose what we wanted to see most, and the monuments won out. Yes, I have seen them many times in movies — who can forget the Lincoln Memorial Reflecting Pool shown in scenes from Forrest Gump — and TV footage, but there's nothing quite like seeing the monuments in person. What beautiful national treasures. Photos and media clips simply don't do them justice.
These monuments immortalize many important figures in our nation's history, including welders and other metal fabricators. (more...)
By: Dan Davis
If you are involved in any way with part design, you should check out Gerald Davis' column in The FABRICATOR. He spent 2010 talking about 3-D CAD tips and tricks while creating the plans for a barbecue grill. This year he's exploring the role 3-D design can play in a fabricator's business success, and with his February 2011 "Precision Matters" column, he has begun the discussion of designing better in-house tools during those times when new orders have slowed a bit. In particular, he's talking about designing shop carts.
Shop carts don't sound like an exciting end product, but they are in pretty much every shop I've ever set foot in. As a pitchman used to say about his tires in a television commercial that aired in my youth, "They don't smell good. They ain't pretty. But everyone needs 'em." (more...)
By: Dan Davis
Dr. Chris Kuehl, the Fabricators & Manufacturers Association's economist, had this nugget of wisdom in his "Business Intelligence Brief" for Sept. 2: "The role of the manufacturing sector in this recession and subsequent recovery is going to be studied for a long time. Thus far the rules of economic rebound are consistently being broken, and it is not altogether clear what is going on. Then again, almost everything about this economic collapse has been a bit odd."
So the thinkers continue to think, and the metal fabricators of the world move forward, looking for ways to deliver products faster and always searching for more customers. They don't need to know the reasons for the slow recovery; they just need to know when the recovery will pick up steam. Unfortunately, no one knows the answer to that.
What do we know? Factory orders increased 0.1 percent in July, held down by declining orders for computers and machinery, according to the U.S. Commerce Department. The Purchasing Managers Index for the U.S. rose from 55.5 in July to 56.3 in August, which indicates expansion in the manufacturing sector. It's not a robust expansion, but manufacturing is doing more than its part to keep the economy from taking another dip.
Even with the creeping expansion, manufacturing companies aren't hiring. They are laying off fewer workers, which is sort of good news, according to those that work in air-conditioned offices and research these types of things.
Like the economists, manufacturers just don't know what they are dealing with. Metal fabricators that I have spoken with in recent weeks describe their shops as busier than last year, but they don't have any reason to believe it will continue. "Nothing's in the pipeline," many of them told me. That makes it hard to forecast a robust picture for the future.
Look closely and you'll see that perhaps we've entered the days when everyone is forced to operate lean, whether they want to or not. Simply put, no one wants inventory. With the chaotic nature of the economy, where the market is up one day and down the next, no company wants to get stuck with the cost associated with unwanted inventory.
If those companies don't want excess inventory, they aren't placing orders for new products until they absolutely have to. As a result, metal fabricators don't have as many orders in the pipeline. When the orders come, customers need the metal fabrications as soon as possible.
A sales representative for a machine tool company told me this week that his company had to wait eight weeks for a part for its bending machines that used to be available in a matter of days only three years ago. The lack of inventory can be a pain for the customer, but most will have to deal with it.
Luckily, many metal fabricators will be able to exploit the situation. They have invested in shop floor practices, capital equipment, and software that have allowed them to squeeze that time between receiving the order and delivering the parts, and these fabricators may be able to step up and meet the increased customer demands while others can't.
I believe the order pipeline eventually will fill again, but it may not be like the good ol' days. The pressure to deliver quality parts just-in-time may be a value-added service that some OEM customers never want to give up.
By: Dan Davis
By now everyone has heard about the massive oil spill taking place in the Gulf of Mexico, a result of an explosion on the Deepwater Horizon oil rig April 20. If you haven't, you'll also be shocked to know that bell bottoms have come and gone out of style again and that Abe Vigoda is still alive .
Estimates suggest that 210,000 gallons of crude a day have been released into the gulf for the last two weeks. This puts the disaster on par with the oil spill from the Exxon Valdez in Alaska in 1989.
Being that the three leaks are in deep water, about 5,000 feet below the surface, plugging them has proven difficult. The oil industry hasn't been faced with anything like this before.
So what did they do? They contacted a contractor and put some welders to work. (more...)
By: Vicki Bell
Business Roundtable’s first quarter 2010 CEO Economic Outlook Survey indicated that the CEOs of America’s leading companies anticipate increased capital expenditures, sales, and employment in the next six months.
A recent survey of manufacturing CFOs, conducted by Grant Thornton LLP, shows that 46.74 percent expect the U.S. economy to improve over the next six months; the same percentage expect it to remain the same; and 6.52 percent expect it to worsen. Almost 60 percent expect their company’s financial prospects to improve during this timeframe; 35.87 percent expect it to stay the same; and only 4.35 percent expect it to worsen.
This month's "Fabricating Update" asked subscribers to share their forecasts for their companies in the next six months. The bottom line: the outlook depends in part on what you produce and who your buyers are. (more...)
By: Vicki Bell
Just looking at this list, you can see how interconnected these four examples are. We need roads and steel bridges to cross the Continental Divide and small businesses to fabricate components to build them. America at its best is a symbiotic confluence of healthy parts creating a strong backbone that allows us to weather all storms, including economic tsunamis. (more...)
By: Tim Heston
When I saw the words manufacturing and boom in one headline, I had to do a double take. An AllianceBernstein economist was especially optimistic, predicting that manufacturing may be gearing up for the biggest turnaround seen in 25 years.
"The evidence points to a 20 percent jump in output in the fourth quarter, as there finally has been an end to the inventory reduction process that has gripped the industry for most of the past two years," said Chris Kuehl, economist for the Fabricators & Manufacturers Association, in a Monday e-newsletter. "The key point for Alliance is that new order growth is far outstripping the current inventory levels, and that is a recipe for growth under most circumstances. If this trend holds, the economy is in for some solid numbers in the months ahead."
By: Tim Heston
A year ago Troy Berg wasn't in a good place.
"I knew in January that 2009 was gone. Never in the history of my business have I had to kiss off a year in January & Now that we're through 2009, the hard cuts have been made, we've made a little bit of money, and those of us who are still standing are looking at 2010 to be a better year."
A few days ago Berg told this to a reporter for the Wisconsin State Journal. Berg is president of Dane Manufacturing, a precision sheet metal shop in Dane, Wis., north of Madison. His comment pretty much sums up where metal fabricators stand today: battered and bruised, cautiously optimistic (an overused phrase these days), and ready to take on a better year. Some are expecting strong growth this year, some foresee it taking several years before sales volume gets back to 2007 and 2008 levels, but most agree we've started the recovery.