Several weeks ago I visited Ometek Inc., a contract manufacturer near the Columbus, Ohio, airport. After reading the manufacturing news this week, I started thinking about the company’s bending department. Here’s why.
This week the business world learned what it pretty much already knew. The Institute for Supply Management reported that manufacturing continues to grow, but that growth is slowing a bit. Still, the fabricated metal products sector reported significant growth; only the apparel industry grew by more.
Two quotes from survey respondents give a decent snapshot of where things stand:
"Our business is softening due to seasonal considerations. Overall, our situation is much better than 2009."
"Customers seem to be pulling back on orders. I suspect that they are trying to reduce their inventory for the approaching year-end."
The first quote is from the machinery sector, the second from transportation equipment. The verdict: Things are better than they were--not great, but better.
Then on Monday the Commerce Department reported significant gains in capital spending. In August, capital goods spending (excluding military goods and planes) rose 5.1 percent, more than many expected. Admittedly, the news was tempered by a slowdown in new orders (down one-half percent) and shipments (down 0.6 percent). But gains in capital spending do show companies are making investments for the future.