October 2020 ISM PMI-Manufacturing Positivity!

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“The manufacturing economy continued its recovery in October. Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories; with every month, they are becoming more proficient at expanding output. Panel sentiment was optimistic…” –Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee.
ISM PMI
Manufacturing continues its sixth consecutive month of recovery.
The manufacturing economy continued its recovery in October. Economic activity in the manufacturing sector grew in October, with the overall economy notching a sixth consecutive month of growth.

The October Manufacturing PMI^® registered 59.3 percent, up 3.9 percentage points from the September reading of 55.4 percent and the highest since September 2018 (59.3 percent).
This figure indicates expansion in the overall economy for the sixth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth.
New Orders Index registered 67.9 percent, an increase of 7.7 percentage points from the September reading of 60.2 percent.
The Production Index registered 63 percent, an increase of 2 percentage points compared to the September reading of 61 percent.
The Backlog of Orders Index registered 55.7 percent, 0.5 percentage point higher compared to the September reading of 55.2 percent.
The Employment Index registered 53.2 percent, an increase of 3.6 percentage points from the September reading of 49.6 percent.
The Supplier Deliveries Index registered 60.5 percent, up 1.5 percentage points from the September figure of 59 percent.
The Inventories Index registered 51.9 percent; 4.8 percentage points higher than the September reading of 47.1 percent.
The Prices Index registered 65.5 percent, up 2.7 percentage points compared to the September reading of 62.8 percent.
The New Export Orders Index registered 55.7 percent; an increase of 1.4 percentage points compared to the September reading of 54.3 percent.
The Imports Index registered 58.1 percent, a 4.1-percentage point increase from the September reading of 54 percent

All indexes reported increases over September.
Fabricated metals reported strong growth.
What’s not to like in this release?
We’re manufacturing positivity!
Chart courtesy Calculated Risk Blog
ISM Report October 2020

August ISM PMI – Manufacturing and Economic Recovery- 4th Straight Month

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4th consecutive month of manufacturing and economic recovery!

“The August PMI^® registered 56 percent, up 1.8 percentage points from the July reading of 54.2 percent. This figure indicates expansion in the overall economy for the fourth month in a row after a contraction in April, which ended a period of 131 consecutive months of growth. The New Orders Index registered 67.6 percent, an increase of 6.1 percentage points from the July reading of 61.5 percent. The Production Index registered 63.3 percent, up 1.2 percentage points compared to the July reading of 62.1 percent. The Backlog of Orders Index registered 54.6 percent, an increase of 2.8 percentage points compared to the July reading of 51.8 percent. The Employment Index registered 46.4 percent, an increase of 2.1 percentage points from the July reading of 44.3 percent. The Supplier Deliveries Index registered 58.2 percent, up 2.4 percentage points from the July figure of 55.8 percent.
“Of the 18 manufacturing industries, 15 reported growth in August, in the following order: Wood Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Textile Mills; Chemical Products; Computer & Electronic Products; Primary Metals; Fabricated Metal Products; Machinery; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Electrical Equipment, Appliances & Components; Paper Products; and Transportation Equipment. ”

Manufacturing up four consecutive months!

PMPA’s Latest Business Trends Report for July 2020 shows our industry following this same track.
Chart courtesy Calculated Risk Blog. We’re a fan.

July ISM PMI 54.2 up 1.6 Over June Second Month in a Row in Positive Territory

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“The July PMI^® registered 54.2 percent, up 1.6 percentage points from the June reading of 52.6 percent. This figure indicates expansion in the overall economy for the third month in a row after a contraction in April, which ended a period of 131 consecutive months of growth. “- Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee
This is great news!

July ISM PMI in positive territory for second month in a row.

Of the 18 manufacturing industries, 13 reported growth in July, in the following order: Wood Products; Furniture & Related Products; Textile Mills; Printing & Related Support Activities; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Chemical Products; Apparel, Leather & Allied Products; Computer & Electronic Products; Primary Metals; Petroleum & Coal Products; Miscellaneous Manufacturing; and Electrical Equipment, Appliances & Components.
The New orders, Production , and Backlog of orders indexes posted increases of 5.1, 4.8, and 6.5 percentage points, respectively.
A welcome and positive sign not only for manufacturing, but the US economy as well.
Manufacturing Optimism!
Chart courtesy Calculated Risk Blog

June PMPA Business Trends Index Up 33% over 2020 Low

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“This month’s 112 value is 37 points or 49.33% higher than the 2009 Calendar year average of 75 during the Great Recession. We’re doing alright!”

PMPA Business Trends Sales Recovered in June graph — PMPA Business Trends Sales Index for June 2020 recovers to 112, up 33% over April 2020 Calendar year low!

PMPA Business Trends Sales Index for June 2020 recovers to 112, up 33% over April 2020 Calendar year low!
All forward looking sentiment indicators for Sales, Lead Times, Employment and Profitability were also positive for the second consecutive month
Our respondents’ data showed that we outperformed the FED’s IP and Manufacturing indicators by a large margin.
We are in a far better place this time around then we were during the Great Recession. ( Our Shops’s Sales are currently 49% higher than the Great Recession low)
These difficult times may just be the beginning of the best thing that has happened in manufacturing, as foreign supply chains continue to prove unreliable, and our shops and essential workers step in to fill the need for critical components.

https://www.pmpa.org/news/latest-news/2020/07/29/pmpa-business-trends-june-2020

May Industrial Production FED Reports Gains

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“Manufacturing output rose 3.8 percent in May, but it was still 16.9 percent below its pre-pandemic level in February. The index for durable manufacturing increased 5.8 percent in May; the most sizable gain among its components was for motor vehicles and parts, where output rose substantially but also remained more than 60 percent below its February level.”
Most sophisticated manufactured goods rely on precision machined parts in order to reliably function. This is great news.
“Total industrial production increased 1.4 percent in May, as many factories resumed at least partial operations following suspensions related to COVID-19. Even so, total industrial production in May was 15.4 percent below its pre-pandemic level in February. Manufacturing output—which fell sharply in March and April—rose 3.8 percent in May; most major industries posted increases, with the largest gain registered by motor vehicles and parts.”
In Real Estate, they say the most important thing is “Location, Location, Location.”
In Economics, I’d like to tell you that it is “Direction, Direction, Direction.”
And while 1.4% increase in industrial production may not seem like a lot (Better than most CD’s are paying, come to think of it) the direction is, as they say
“…a turn for the better.”

Industrial Production up 1.4% in May 2020

Markets showing strength
The major market groups posted broad-based gains in their production indexes in May, but each remained well below its pre-pandemic level.

consumer goods rose 3.9 percent, led by a significant rebound for automotive products.[1]
production of business equipment rose 5.8 percent and was boosted by a substantial increase in transit equipment as most factories producing motor vehicles and civilian aircraft reopened.
The indexes for defense and space equipment, construction supplies, and business supplies also recorded gains.
The output of materials decreased 0.8 percent, as the production of energy materials was held down by declines related to oil extraction.

Industry Groups
Manufacturing output rose 3.8 percent in May, but it was still 16.9 percent below its pre-pandemic level in February.

The index for durable manufacturing increased 5.8 percent in May; the most sizable gain among its components was for motor vehicles and parts, where output rose substantially but also remained more than 60 percent below its February level.
Durable goods industries that recorded production increases between 8 percent and 10 percent include nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture and related products.
The index for nondurables rose 2.1 percent, with advances of around 10 percent or more for textile and product mills, for apparel and leather, for printing and support, and for plastics and rubber products. The output of other manufacturing (publishing and logging) moved up 2.5 percent.

Now the levels are not back to prior Pandemic readings. But we have certainly flattened the curve Virus wise!

Chart from Washington Post reported in AIER

“Direction, Direction, Direction.” This is why we remain positive.
FED Reserve IP May 2020
What spike? AIER

May ISM-PMI Economy Expanding, Manufacturing Still Contracting

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“Economic activity in the manufacturing sector contracted in May, and the overall economy returned to expansion after one month of contraction. “The May PMI^® registered 43.1 percent, up 1.6 percentage points from the April reading of 41.5 percent. This figure indicates expansion in the overall economy after April’s contraction, which ended a period of 131 consecutive months of growth.”– Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee

That blue vertical line at the right edge of the chart- indicates recession.

“The coronavirus pandemic impacted all manufacturing sectors for the third straight month. May appears to be a transition month, as many panelists and their suppliers returned to work late in the month. However, demand remains uncertain, likely impacting inventories, customer inventories, employment, imports and backlog of orders. Among the six biggest industry sectors, Food, Beverage & Tobacco Products remains the only industry in expansion. Transportation Equipment; Petroleum & Coal Products; and Fabricated Metal Products continue to contract at strong levels,” says Fiore.
It has been our thinking that the economy itself is strong, but the exogenous shock- the impact of not just the corona virus but also the government ordered shutdowns- have caused the current weakness. We believe that the recovery will be positive based on this underlying fundamental economic strength. Here is how ISM see’s this issue:
“A PMI^® above 42.8 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the May PMI^® indicates the overall economy grew very slightly following contraction in April, which ended a 131-month period of growth. The manufacturing sector contracted for the third consecutive month. “The past relationship between the PMI^® and the overall economy indicates that the PMI^® for May (43.1 percent) corresponds to a 0.1-percent increase in real gross domestic product (GDP) on an annualized basis,” says Fiore.”
May 2020 ISM PMI
Graph courtesy Calculated Risk Blog

Ventilator Parts PMPA Making a Difference

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Our nation has an urgent need for Ventilators, and General Motors, one of the companies charged with retooling to make ventilators, asked a PMPA member if they could make all of the parts needed. Our member brought the prints for the ventilator parts to PMPA to leverage the capabilities of our entire association. The PMPA team submitted the prints to our membership and compiled the list of PMPA members who have the capability and the capacity to produce parts for ventilators. The list has been submitted to GM, FEMA and The White House, and we have confirmed that at several parts have already been awarded to our members and are in production. As our members report additional capacity and capability we will submit an addendum.

Ventilator parts in production at PMPA member shop in Illinois #makingpartsthatmakeadifference

Manufacturing matters. And local manufacturing can make a local difference. The race to the bottom for the globally lowest price is not helping us in our hour of need. Local solutions can solve Global problems. American Manufacturers are stepping up. We need to keep that in mind after we get through this crisis.

3-S Your Shop- COVID-19

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“The one thing that you can do is to stand down for ten minutes and 3-S your shop.”
Paul Akers, the hands on Manufacturer who also wrote 2 Second Lean, was one of our Update conference’s most popular speakers. (Paul will tell you, as he told us, he’s not a speaker. He’s not a consultant. He’s a MANUFACTURING GUY.)

One of the ideas that he shared is so appropriate right now, I feel that I have to share.
The one thing that you can do right now is to do a ten or fifteen minute stand-down and 3-S (Clean, sort, and organize) your premises
Have your team sanitize every surface that anyone touches.

Everyone gets to do their part!

The fellow on the ladder cleaning the sign- that the V.P. of Sales.

People get pretty excited when there is a threat- but there is nothing that they can do. Its called the fight or flight syndrome, and when people can’t do anything, they get stressed.
Look at 3-S’ing your premises as a great way to 1) take positive steps to prevent transmission of the virus or germs among your team, and 2) a positive step to de-stress because people are doing work to reduce everyone’s risk.
Do it everyday- even when this COVID-19 event is in our rear-view mirror.
Thank you Paul Akers for giving us a tool we can use to minimize our risk as we improve our workplace and culture.
That’s a lot of great takeaways from just two slides, Paul. Maybe we should call it 2-slide lean. What do you think Paul?

Supply Chain- Ready to Help!

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Throughout history, American manufacturers have answered the call to find solutions, support progress and step up in times of crisis. Our U.S. manufacturers and workers are ready to minimize operational disruptions and help produce a quality, reliable products ready to ship to any location. We’re here to help.
Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) are business as usual for the North American Manufacturing Industry.
We remain on the job ready, willing, and able to get you the critical components that you need for your critical quality and human safety applications.

Having supply chain / procurement issues? Our member shops are available to help. Check our websites for assistance in finding a shop:
www.amba.org American Mold Builders Association
www.ntma.org National Tooling and Machining Association
www.pmpa.org Precision Machined Products Association
www.pma.org Precision Metalforming Association
www.tmaillinois.org Technology & Manufacturing Association
Throughout history, American manufacturers have answered the call to find solutions, support progress and step up in times of crisis. Our U.S. manufacturers and workers are ready to minimize operational disruptions and help produce quality, reliable products ready to ship to any location.

It’s what we do.

Coronavirus- One Thing to Reduce Your Risk of Community Acquired Infections

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The experts say “Wash your hands.“
The experts say “Don’t touch your face.”
Actually they say “Avoid touching your eyes, nose, and mouth with unwashed hands. Viruses that cause colds can enter your body this way and make you sick.”
If only playing Simple Simon with the experts calling the shots would keep us safe.

The experts say wash your hands- why don’t they suggest that you not touch contaminated surfaces in the first place?

In manufacturing, we have a thing called Root Cause Corrective Action. We try to prevent reccurrence by eliminating causes.
Basically we work on offense against causes. Not play defense against things that have already happened.
From a root cause preventive action point of view, what is one thing that you can do to reduce your risk of community acquired infections?

Use a stylus!

If you don’t touch the infectious contamination on the keys used by who knows how many people before you…

Do you know how many people touched those keys before you?
“Reviewing the literature on all available human and veterinary viruses within this family, encompassing 22 studies, researchers have found that the human pathogens can persist on surfaces and remain infectious at room temperature for up to nine days. “- Sciencealert corona virus on surfaces
If you knew that someone had a tissue in their hand when they used the keypad, would you not use the keypad?
(Hint, I see that happening a lot)

How many keypads and touchscreens do you get to touch in a day?
I count 4 or 5 in a typical day- grocery store, pharmacy, bank counter and ATM, gas station pumps and counter, retail shops, department stores.
On non typical days, add Airline parking access gate touchscreen and airline check-in kiosk touch screens. Hundreds of people ahead of me at the airport…
Whose job is it to disinfect them?
When I asked, all I got was blank stares… though at my local Gas Station the Cashier has been doing a great job of wiping down touchscreens.
What if instead of touching all of these with your fingers and possibly acquiring infectious bacteria or viruses- what if we didn’t touch these contaminated surfaces?
What if a stylus did the touching?
Wouldn’t that keep us safer, by reducing our exposure to infectious materials with our hands?
Washing hands is fine. We get it.
But not getting our hands contaminated with infectious contaminants in the first place?
We think that that is far better than playing only defense- getting contaminated, and then washing up.
We think that using a stylus instead of your fingers on touchscreens and keypads is the one thing that you can do that will positively reduce your chance of community acquired infection.
We’re not sure why the experts don’t suggest it.
Use a stylus!
I purchased a bunch from Staples to give to my colleagues at work.

You can order them on Amazon too.

We think that using a stylus instead of your fingers on touchscreens and keypads is the one thing that you can do that will positively reduce your chance of community acquired infection.
What do you think? More importantly, what will you do?