PMPA shares important precision machining information you may have missed while you were making essential parts.
December 20, 2024
Industrial Production
Industrial production (IP) moved down 0.1 percent in November after declining 0.4 percent in October. In November, manufacturing output rose 0.2 percent, boosted by a 3.5 percent increase in the index for motor vehicles and parts. At 102.0 percent of its 2017 average, total IP in November was 0.9 percent below its year-earlier level. Capacity utilization stepped down to 76.8 percent in November, a rate that is 2.9 percentage points below its long-run (1972–2023) average.
Link: https://www.federalreserve.gov/releases/g17/current/
Our take: Consensus expectations were a rise of 0.3 percent, but declines in mining and utilities were the reason for the surprise,. Manufacturing-our segment- was up 0.2 percent.
Machine Tool Orders
US machine tool orders declined 14.5 percent from September 2024 falling from the IMTS bounce. Orders fell 5.5 percent versus October of 2023 and are down 7.5 percent over the first ten months of 2023. Our take, sales are down from election uncertainty and expectation of lower interest rates in the near term. With lower rates coming, shops are waiting to spend cap ex dollars where they feel they will get the most long-term value.
ISM
The Institute for Supply Management just released their Fall Forecast for 2025. According to Ism “”Expectations for 2025 are positive, as 60 percent of survey respondents expect revenues to be greater in 2025 than in 2024. The panel of purchasing and supply executives expects a 4.2-percent net increase in overall revenues for 2025, compared to a 0.8 percentage point increase reported for 2024. Sixteen of the 18 manufacturing industries expect revenue improvement in 2025… “Manufacturing’s purchasing and supply executives expect to see overall growth in 2025. They are optimistic about overall business prospects for the first half of 2025 and more excited about faster growth in the second half.,”
Our take This is in close agreement with PMPA’s current Business trends Reporting and also The ITR November Report available on our website.
Link: www.ismworld.org/supply-management-news-and-reports/…
Cutting Tool Orders
US cutting tool orders increased 12.6 percent over September 2024. Orders are down by .2 percent over October 2023. Year-to-date shipments are up .6 percent over the same period last year. Our take, with cutting tool orders flat for the year and our business trends index currently up 1.4 percent over last year’s average, our shops are maximizing the efficiency of their tooling dollars.
3D Printing
Princeton engineers have developed an innovative 3D printing technique that produces soft plastics with customizable flexibility and stiffness. This new method uses thermoplastic elastomers, which are both recyclable and affordable. The technique leverages nanoscale structures to create materials that are stretchy and flexible, yet rigid in specific directions. This breakthrough has significant potential applications in fields such as soft robotics, medical devices, and custom high-performance shoe soles.
PODCAST – Identifying ISO Workpiece Material Groups – Steel Edition
Twist Drills for Success (a Dave & Davey video)
PMPA shares important precision machining information you may have missed while you were making essential parts.
December 13, 2024
Small Business
The Small Business Optimism Index, rose by eight points to 101.7, marking the highest reading since June 2021. This surge in optimism is attributed to recent election results that signal a shift in economic policy, fostering a more favorable environment for small businesses. Owners expecting the economy to improve rose five points to 41 percent. Our take, with uncertainty of the election businesses expect Washington to get to work solving key tax issues before their expiration. Providing greater certainty for planning the way forward.
https://www.nfib.com/news-article/monthly_report/industry-report-july-2024/
CPI
CPI increased by 0.3 percent in November after having an increase of 0.2 percent for the previous four months. The index increased 2.7 percent over November 2023. Core Inflation increased at 0.3 percent in November, which is about a 3.6 percent annualized rate. Our take, inflation has eased over the past year but further progress has stalled with recent interest rate cuts. Core inflation has maintained 0.3 percent for the last four months. That is a stable level of increases but at too high of a rate to achieve the long-term prospects of 2 percent inflation.
https://www.bls.gov/news.release/cpi.nr0.htm
PPI
Producer prices rose by 0.4 percent in November, the highest level in five months. November came in double the market forecast of 0.2 percent. The October number was revised up to0 .3 percent. Core PPI rose by 0.2 percent in line with market expectations. Our take, prices are starting to rise again at the producer level. The Federal Reserve’s interest rate cuts are proving to have been premature.
https://www.bls.gov/news.release/ppi.nr0.htm
PODCAST – The Power of the Coating
ARTICLE – Slings — Critical Infrastructure in Your Shop
PMPA shares important precision machining information you may have missed while you were making essential parts.
December 06, 2024
ISM
According to PR Newswire ISM manufacturing PMI came in at 48.4, better than the expected 47.5. Registering the highest value in five months. New orders returned to expansion increasing to 50.4 versus the October reading of 47.1. Our take, the index is still in contraction, but a bright spot is the new orders number moving into slight expansion territory. We must have orders to expand.
Durable Goods
New Orders for manufactured durable goods in October, up following two consecutive monthly decreases, increased $0.7 billion or 0.2 percent to $286.6 billion. This followed a 0.4 percent September decrease. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $0.4 billion or 0.5 percent to $97.1 billion.
Shipments of manufactured durable goods in October, down three consecutive months, decreased $1.6 billion or 0.6 percent to $285.2 billion. This followed a 0.8 percent September decrease. Transportation equipment, also down three consecutive months, drove the decrease, $1.9 billion or 2.1 percent to $92.0 billion.]
Link: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
Our take: Transportation Equipment is the real story here- think Strike at Boeing- resolution improving orders while lingering impacts hindering shipments.
Metal Prints
Engineers at the University of Wisconsin-Madison have achieved a major advancement in metal additive manufacturing by mitigating three common defects simultaneously with a new ring-shaped laser. The new laser improves productivity, reduces splatters, and improves surface finish. Better lasers mean better quality metal prints with more consistent mechanical properties.
Job Openings
The number of job openings was little changed at 7.7 million on the last business day of October- down just 941,000 over the year. Over the month, both hires and total separations, at 5.3 million, changed little, down just 369,000 for the year.. Quits increased to 3.3 million – up 228,000) but down 308,000 for the year., while layoffs and discharges changed little. In durable goods manufacturing, the layoffs and discharges decreased ~37,000.
Our take: be careful which news report you pay attention to. Reuters take is that the US labor market is steadily cooling, While CNBC claims Jobs openings jumped… and other financial sites proclaim JOLTS Job Openings Rise to 7.744 million.The BLS itself called it “little changed.” Who are you going to believe? We’ll take “just the facts, please…
Cutting Tool Orders
In September 2024, U.S. cutting tool orders totaled of $188.7 million, establishing 0.7% increase year-to-date. Despite a 10% decrease from August 2024 and a 6.3% drop from September 2023, the year-to-date shipments totaled $1.86 billion. Our take, market growth, although modest, reflects the industry’s resilience through this year’s challenges inflation, interest rates, and pre-election uncertainty. Cutting tools purchases are currently lagging our business trends index by .7%, which indicates our shops are continuing to become more efficient.
PODCAST – Composition of Steel-Reporting Practices for Unspecified Elements
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PMPA shares important precision machining information you may have missed while you were making essential parts.
November 22, 2024
Mfg Tech Orders
In September 2024, manufacturing technology orders reached $450.6 million, up 24 percent over August 2024 and a 14.6 percent rise over September 2023. This surge highlights the industry’s recovery following IMTS’s return to Chicago. Our take, despite a 7.7 percent year-to-date decline compared to 2023, September orders were the highest of the year, signaling optimism for the future.
https://www.amtonline.org/article/USMTO-0924
World Crude Steel
In September 2024, world crude steel was 143.6 million metric tons, marking a 4.7 percent decrease compared to September 2023. The EU produced 10.5 million metric tons, a slight increase of 0.3 percent, and North America produced 8.6 million metric tons, down 3.4 percent. The top steel-producing countries included China, which produced 77.1 million metric tons, down 6.1%, and the United States, which produced 6.7 million metric tons, up 1.2% Our take, we are continuing to see a decline in Chinese steel production to the point where they may fall below rest of the world production. World steel production is continuing to decline but European and United States production is advancing indicating the high-quality steels used in our products are seeing strong demand.
https://worldsteel.org/media/press-releases/2024/september-2024-crude-steel-production/
Cybersecurity
As automation becomes integrated into our shops, the potential damages caused by a cyberattack become increasingly costly. There is an urgent need for enhanced cybersecurity measures to protect automated systems from evolving threats. We must be proactive to safeguard against vulnerabilities. Networks must be tested to ensure security. Some equipment has built in backdoors to make communication easier for the manufacturer. Is that still enabled on your equipment? Are you thinking about the security implications of your network connected machine tools?
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ARTICLE – Turned and Polished Steel Barstock
PMPA shares important precision machining information you may have missed while you were making essential parts.
November 15, 2024
NFIB Small Business
The NFIB Small Business Optimism Index in the US rose to 93.7 in October 2024, the highest in three months, up from 91.5 in September and above predictions of 91.9. Thirty-five percent of owners reported positions they could not fill in the current period. Twenty-three percent of owners reported inflation as their number one concern. Our take with election season over optimism should continue to rise. Elections breed uncertainty, which weighs on optimism. Optimism turning positive before the elections is good sign we are headed in the right direction.
Inflation
Inflation in October moved up to 2.6 percent over a year earlier. The first move up in the last seven months. Inflation was .2 percent month over month which equates to 2.4 percent annualized rate. Core inflation remained the same at .3 percent over September and 3.3 percent over a year ago. Our take, inflation is remaining stubbornly high. A .3 percent core reading annualizes to 3.6 percent per year if the trend is maintained. There continues to be too many dollars chasing too few goods. The Feds recent decision to cut rates again will add fuel to the fire.
https://www.bls.gov/news.release/cpi.nr0.htm
Interest Rates
The Federal Reserve cut interest rates 25 basis points in the most recent FOMC meeting. The committee reiterated their strong commitment to maintaining inflation rates of 2 percent and maintaining full employment. Our take, with inflation starting to stabilize the recent Fed rate cuts may have been a little premature. Inflation had been declining. Now we have the first increase year-over-year in the last seven months. Time will tell if inflation has been stalled or if it is remaining sticky.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20241107a.htm
AI Learning To Smell
AI is now learning to smell. Teaching a computer to smell goes deeper than just that funky odor coming from the trash can. Smell is the process which volatile compounds reach our nose and we recognize them as smell. Osmo is using AI to sniff out counterfeit products, in this case sneakers. Using AI to map molecules emanating from objects could have vast industrial applications. Detecting when coolant is going bad, detect burning on circuit boards before failure and even early warning system for fire in a building. Technology like this can help us find problems before they became major problems.
https://www.fastcompany.com/91226556/osmo-smell-ai-counterfeit-sneakers
PODCAST – 5 Must-Do Safety Contacts
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PMPA shares important precision machining information you may have missed while you were making essential parts.
October 25, 2024
Industrial Production-September 2024
According to the Federal Reserve Board, Industrial production (IP) decreased 0.3 percent in September after advancing 0.3 percent in August. The Boeing strike held down total IP growth by an estimated 0.3 percent in September, and the effects of two hurricanes subtracted an estimated 0.3 percent. For the third quarter as a whole, industrial production declined at an annual rate of 0.6 percent. Manufacturing output moved down 0.4 percent in September, for a year over year decrease of 0.5 percent.
Our take: Aerospace is a major market served by our shops , so a work stoppage at the US’ s largest manufacturer of Civilian aircraft does not surprise us with a drop in production. Hurricanes impact makes us rethink the idea that manufacturing is still a “middle America rust belt thing- clearly, there were manufacturing impacts- the index shows it. We appreciate the relatively small increments that the Manufacturing sub- index seems to be moving in.
Link: https://www.federalreserve.gov/releases/g17/current/
Cutting Tool Orders
Cutting tools orders up 9.1% in August over July 2024. The year-to-date shipments are up 1.5% when compared to the same period in 2023. August orders are down 4.5% over August of 2023. Our take, August cutting tool orders bounced over July 2024 in a similar fashion to our business trends index which was up 2.1% over the same period. Cutting tools have been more volatile than our index but other than a dip in July cutting tool orders are running in a tight range.
AI in MFG
Machinery companies are prioritizing artificial intelligence (AI) to tackle challenges like supply chain issues and skilled worker shortages. The AI market in industrial machinery is expected to reach $5.46 billion by 2028. Companies are focusing on AI technologies such as data analytics, machine learning, deep learning, and generative AI to address their top business challenges. Our take, AI is a powerful tool that is amplifying our performers’ talents. Tools like this allow data to be analyzed more quickly, increasing the speed and power of decisions.
World Steel Production
World steel production totaled 143.6 million tonnes in September 2024 down 4.4% over September 2023. Chinese production was down 6.1% year over year. The United States and Europe were up 1.2% and 0.3%. Our take, construction in China and around the world is weighing on Chinese production. Increases in the US and EU which produce the higher quality steels found in our products is a good sign that the market for precision machined components is still moving in a positive direction.
https://worldsteel.org/media/press-releases/2024/september-2024-crude-steel-production/
PODCAST – Slips, Trips and Falls
PMPA shares important precision machining information you may have missed while you were making essential parts.
October 18, 2024
Wholesale Trade
According to the US Census, August 2024 sales of merchant wholesalers…, after adjustments for seasonal variations and trading day differences, but not for price changes, were $670.9 billion, down 0.1 percent (±0.4 percent)* from the revised July level, but were up 1.1 percent (±0.5 percent) from the revised August 2023 level.
Our take: Sales of Durable goods that use our parts remain steady and improving.
Link: https://www.census.gov/wholesale/current/index.html
CPI and PPI
Little change is good.
CPI: Consumer prices rose 0.2 percent over the month, 2.4 percent over the year for September, just above consensus expectations of a 2.3% year-over-year increase. This is the smallest over-the-year increase since February 2021. Our take: Prices remain high for consumers, but the rate of increase has slowed meaningfully.
Link: https://www.bls.gov/news.release/cpi.nr0.htm
PPI: No change is good change.
The Producer Price Index for final demand (we used to call this indicator “wholesale price index”) was unchanged in September, after rising 0.2% in August.
The final demand index rose 1.8% on an unadjusted basis, a slight decline from the 1.9% over-the-year increase in August. Our take: While we remain unconvinced that the FED has it figured out, the CPI and PPI are showing lower volatility for our shops’ and our employee’s pocketbooks. We are still adverse to fixed price and long term contracts.
Link: https://www.bls.gov/news.release/ppi.nr0.htm
International Trade
The Bureau of Economic Analysis International Trade report shows that in August, exports of capital goods improved $4.9 billion to $179.4 billion (2.2 percent increase). At the same time, imports of goods decreased $3.9 billion, with automotive vehicles, parts, and engines decreasing by $1.3 billion.
Our take: A closer look beyond the headline trade deficit shows incremental improvements both in increasing exports of goods, and reducing imports in our largest market served (automotive). This data support PMPA’s continued optimism for our shop’s business prospects.
Link: https://www.bea.gov/news/2024/us-international-trade-goods-and-services-august-2024
PODCAST – Single Point of Failure
CRIBSHEET – #132: Why You Should Care About Slips, Trips and Falls
PMPA shares important precision machining information you may have missed while you were making essential parts.
October 4, 2024
Durable Goods
New orders for manufactured durable goods in August, up six of the last seven months, increased just $0.1 billion or virtually unchanged to $289.7 billion, according to the U.S. Census Bureau. This followed a 9.9 percent July increase. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders decreased 0.2 percent. Electrical equipment, appliances, and components, drove the increase, $0.3 billion or 1.9 percent to $14.4 billion.
Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $1.6 billion or 0.5 percent to $289.4 billion. This followed a 1.1 percent July increase. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $1.9 billion or 1.9 percent to $97.1 billion.
Our take: There continues to be a pessimistic bias towards manufacturing in the press, and these numbers do not justify the pessimism. Orders and shipments both defied the sharp drop expected by most pundits. Reversion to the mean is likely to lead to increased production, shipments and employment.
Link: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
Job Openings
The number of job openings was bounced back up to 8.0 million in August. Increasing by a little over 300 thousand. Openings were down by 1.3 million over the year. The job opening rate sits at 4.8 percent. Our take, a bounce in openings suggests that companies are still looking to hire. Good news for the economy but if we trend in the direction, we have seen in the last couple of years many more openings than people to fill them will make for a tight labor market.
https://www.bls.gov/news.release/jolts.nr0.htm
Workforce
The Milwaukee sentinel Journal featured an article on Manufacturing jobs in Wisconsin, full of facts to help with conversations with prospective employees regardless of state.
- Manufacturing jobs still pay 20% more than those in the service industry
- Job opportunities and economic impact are significant;
- Manufacturing continues to need to recruit and retain talent.
Definitely worth your read, even if you are located in another state.
ISM PMI
According to PR News Wire the ISM Manufacturing PMI came in at 47.2 in September dead even with August. New orders remained in contraction with a reading of 46.1, which was 1.5 points higher than in August. Our take, our PMPA Business trends index continues to indicate that we are in a positive year. Continued long-term contraction of PMI may indicate more structural economic conditions rather than relevant data points to our industry.
Worls Crude Steel
World crude steel production was 144.8 million tonnes (Mt) in August 2024, a 6.5 percent decrease compared to August 2023. Chinese production decreased 10.4 percent. The EU and Europe other than EU were up 2.2 percent and 8.4 percent, respectively. Our take, European production has been increasing consistently this year. Likely due to increased production of leaded steels for export to the US as well as specialty products.
https://worldsteel.org/media/press-releases/2024/august-2024-crude-steel-production/
PODCAST – Macro Programming Basics
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September 27, 2024
Potential Port Strike
U.S. ports from Maine to Texas are preparing for a potential shutdown starting October 1st when 45,000 dockworkers may walk of the job. Negotiations on a new contract halted in June. Our take? The potential to see supply chains squeezed to COVID levels is real. If you are buying steel from overseas and have contract obligations, you might want to keep some safety stock. If you are buying leaded steel, you are buying from overseas. Be vigilant and communicate with your suppliers.
Cutting Tool Orders
July cutting tool orders are up 1.7% over July 2023. Orders year-to-date are up 2.5% versus the same period a year earlier. Orders in July fell 7.8% over June 2024. The cutting tool market has cooled somewhat as the 3-month moving average has dropped below the 12-month moving average. The numbers for 2024 are much more leveled as we have seen in our business trends report. The range is much tighter this year with slight growth in total orders.
Voice with A.I
OpenAI rolled out advanced voice features to paid subscribers. Users can now interact with Chat GPT in a conversation similar to Siri and Alexa. Our take? With the release of voice interactions, science fiction is now becoming reality. As large language models become more conversational it will expand the group of users that can interact with A.I. As with any technology there is good and bad and ease of access will inevitably create new security holes that need to be filled. Make sure your business has an AI policy in place.
PODCAST – Psychological Safety
ARTICLE – What is the True Value of Your Finished Goods Inventory ?
PMPA shares important precision machining information you may have missed while you were making essential parts.
September 20, 2024
Fed Reserve Rates
The federal reserve hit with a surprise 50 basis point rate cut released from the FOMC meeting today. The market had been expecting a small 25 basis point cut. Our take, lowering of interest will make equipment and lines of credit easier to manage. The Fed is moving to easier money policies could flame inflation again. The dot plot is indicating at least a 25 basis point cut by the end of the year with a little over half projecting the rate to drop an additional 50 basis points by the end of 2024.
Empire State Manufacturing Survey Turns Positive
Business activity grew in New York State for the first time in nearly a year, according to firms responding to the September 2024 Empire State Manufacturing Survey. The headline general business conditions index rose sixteen points to 11.5. New orders climbed, and shipments grew significantly. Delivery times and supply availability were steady, While inventories levelled off.
However, labor market conditions remained soft, with employment continuing to contract modestly and the average workweek holding steady. The pace of input and selling price increases were little changed. Firms grew more optimistic that conditions would improve in the months ahead, though the capital spending index dipped below zero for the first time since 2020.
Our take: While the general business indicator grew modestly, the shipment index (which rose eighteen points to 17.9) to a multi- year high shows a strong positive change in trend for shipments. Stronger shipments definitely justify optimism, as growing shipments = equals growing revenue.
Link: https://www.newyorkfed.org/medialibrary/media/Survey/Empire/empire2024/ESMS_2024_09.pdf
Tariff on China
Sharp tariff hikes on imports from China, including a 100 percent duty on electric vehicles, will take effect on Sept. 27, the Biden administration confirmed on September 13.
The Office of the U.S. Trade Representative (USTR) confirmed most of the increased rates that the White House had announced in May, with some adjustments to the list.
Beginning on Sept. 27, the tariff on electric vehicles (EV) imported from China will quadruple from 25 percent to 100 percent.
Our take: While we prefer non-government intervention in the markets that we serve, “tough, targeted” tariffs” such as these are essential to counteract China’s subsidies and technology transfer policies, which have led to theft of US companies’ intellectual property, overinvestment, and excess production capacity.
USTR’s Federal Register Notice here: https://ustr.gov/sites/default/files/Section%20301%20Modifications%20Determination%20FRN%20(Sept%2012%202024)%20(FINAL).pdf
Microsoft
Microsoft has updated a key cryptographic library with two new encryption algorithms designed to withstand attacks from quantum computers. Microsoft encrypts data in its products. Products like Azure Cloud, Microsoft 365, and other cloud data. Our take, as cryptography capabilities increase so does the sophistication of those who exploit systems. It is a constant arms race of better locks and better lockpicks. We use and create mission critical data in our shops. We need to be using the best locks.
Machine Tool Orders
In July machine tool orders totaled $321.7 million, falling 19.3% from June 2024 orders and down 7.8% from July 2023. Year-to-date orders are down 10.5% from 2023. Our take, when looking at historical data for election years sales tend to decline. Elections create uncertainty and uncertainty tightens purse strings. Take advantage of deals while everyone else watches from the sidelines.
Industrial Production
In August, industrial production rose 0.8 percent after falling 0.9 percent in July, reported the Federal Reserve on Tuesday, September 17, 2024. The total index was exactly even Aug 23 to Aug 24 at 0 change. Similarly, the output of manufacturing increased 0.9 percent in August after decreasing 0.7 percent in July ’24. (Rising from 98.7 to 99.6 in August-up 0.2 year over year.) The August increase was due in part to a recovery in the index of motor vehicles and parts, which jumped nearly 10 percent in August after dropping roughly 9 percent in July. The index for manufacturing excluding motor vehicles and parts moved up only 0.3 percent in August. Capacity utilization moved up to 78.0 percent.
Our take: While total industrial production is exactly even year over year, and manufacturing is up just 0.2 year over year, these support our thesis of steady and level production for our shops. Far better than drastic declines. Automotive continues to be the major market driver for manufacturing.
Link: https://www.federalreserve.gov/releases/g17/current/
PODCAST – PMPA’s Annual Meeting 2024 Primer with Renee Merker
ARTICLE – Safety First! That Applies to Psychological Safety, Too
PMPA shares important precision machining information you may have missed while you were making essential parts.
September 6, 2024
Nippon/U.S. Steel
According to insiders the executive branch is expected to block the Japanese company Nippon Steel’s takeover of US Steel Corp. US Steel says it will pursue all legal methods to ensure the sale goes through. Our take Our take, while a US buyer is preferable, the economics of the Japanese offer were more attractive to stockholders. Japan is not an adversary, but the executive branch is trying to make this about national security. Our shops continue to pay the highest global prices for steel due to executive branch ‘protectionism.’ Politics have consequences.
https://finance.yahoo.com/news/biden-block-nippon-steel-us-175915489.html
Durable Goods
New orders for manufactured durable goods in July, up five of the last six months, increased $25.9 billion or 9.8 percent to $289.5 billion, down from the previously published 9.9 percent increase. This followed a 6.9 percent June decrease. Transportation equipment, up two of the last three months, drove the increase, $26.3 billion or 34.7 percent to $102.1 billion.
Shipments of manufactured durable goods in July, up five of the last six months, increased $3.1 billion or 1.1 percent to $291.1 billion, unchanged from the previously published increase. This followed a 1.2 percent June increase. Transportation equipment, also up five of the last six months, drove the increase, $3.4 billion or 3.5 percent to $99.1 billion.
Inventories of manufactured durable goods in July, up three of the last four months, increased $0.7 billion or 0.1 percent to $529.7 billion.
Our take: this most recent Monthly full report on Manufacturers Shipments, inventories and orders was positive with increases in New orders for manufactured Durable Goods, level shipments- exactly what PMPA’s own Business Trends Report for July reported- and a very slight increase in inventories of just 0.1 percent. The data- as opposed to the headlines- is indicating steady cadence for US manufacturing.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf
U.S. Job Openings
US job openings dropped to 7.67 million in July- the lowest since January 2021. Interestingly, the US Bureau of Labor Statistics characterized this three and a half year low as “little changed.”
The job openings were down 1.1 million over the year, and the change in job openings available in manufacturing were not large enough for mention in the official release. Health care and social assistance, state and local government, and transportation, warehousing and utilities led the decliners. Important to note, the June job opening numbers were revised down by a further 274,000 to 7.9 million.
Our take: The job openings per available worker is now about half of where it had been after we came out of the great COVID -19 displacement. This softening of demand for workers will cue the “data-dependent” FED to begin lowering interest rates.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
World Steel Production
World steel production was down 4.7 percent in July when compared to a year earlier. Chinese production dropped 9 percent dragging the index down. Rest of the World (ROW) production came in up .9 percent. Our take, the Chinese dominance in the steel market is starting to show cracks. China being by far the worlds largest steel producer tends to move the index. China produces more than the other nine countries on the top 10 producers.
https://worldsteel.org/media/press-releases/2024/july-2024-crude-steel-production/
3D Scanner
A new light weight handheld 3d scanner has been introduced that utilizes carbon fiber scales to reach accuracies of .02mm X .05mm. Our take, 3d technology is growing by leaps and bounds. A device that is just slightly larger than a phone being able to reach precision accuracies is going to take quality to a new level. It will be exciting to see what development 3d scanning and AI combined bring to market in the next few years.
https://3dprinting.com/news/revopoint-releases-miraco-plus-3d-scanner-with-photogrammetry-kit/
PODCAST – Recovery Month (with special guest Adria Bagshaw)
CRIBSHEET – #131: FANUC Macro Programming Basics
PMPA shares important precision machining information you may have missed while you were making essential parts.
August 30, 2024
Durable Goods
Good news: New orders for manufactured durable goods in July, up five of the last six months, increased $26.1 billion or 9.9 percent to $289.6 billion, the U.S. Census Bureau announced today. Excluding defense, new orders increased 10.4 percent. For our fabricated metals industry, the change in shipments from June to July was up just 0.1 percent; New orders up just 0.2 percent.
Not so good news: The June new orders for manufactured durable goods report was a 6.9 percent decrease. In July, excluding transportation, new orders decreased 0.2 percent.
Link: https://www.census.gov/manufacturing/m3/adv/current/index.html
Our take: The 9.9 percent increase in durable goods orders is largely attributable to recovery in transportation. However the incremental change of just 0.2 percent for new orders is nothing exciting. More of the same… could be much worse.
3D Printing
Ford PD Merkenich in Cologne, Germany has utilized Formlabs printers in the development of the new Explorer model. Making design an iterative process is decreasing time to market. Our take, it is exciting to see 3d printing become more mainstream for design. Have you thought about utilizing 3d printing to help your customers create rapid prototypes? Have you thought about using 3d printing to create tooling and fixturing designs in your shop?
https://www.youtube.com/watch?v=g3CbnshP-f8
Steel in China
China has suspended the approval of new steel plants as demand for steel slows in China. Demand has fallen 10 percent since 2020. China is the world’s largest producer of steel and exports have increased steadily since 2016 as they have found it difficult to sell steel locally as demand declined. Our take? When even the Chinese government acknowledges that they have overbuilt steel capacity, we can expect volatility in global markets until a new equilibrium is established. Maintaining our focus on quality of supply will be our shops secret to staying nimble in volatile markets.
https://finance.yahoo.com/news/china-puts-brake-steel-capacity-015306847.html?guccounter=1
Durable Goods Indicator- V Shaped Recovery
PMPA shares important precision machining information you may have missed while you were making essential parts.
August 23, 2024
Industrial Production
Industrial Production July 2024
Industrial production fell 0.6 percent in July after increasing 0.3 percent in June. Hurricane Beryl held down the growth of industrial production by an estimated 0.3 percentage point, according to the Federal Reserve’s G.17 release. Manufacturing output stepped down 0.3 percent as the index for motor vehicles and parts fell nearly 8 percent; manufacturing excluding motor vehicles and parts rose 0.3 percent. At 102.9 percent of its 2017 average, total industrial production in July was 0.2 percent below its year-earlier level. Capacity utilization moved down to 77.8 percent in July, a rate that is 1.9 percentage points below its long-run (1972-2023) average.
Link: https://www.federalreserve.gov/releases/g17/current/g17.pdf
Our take: Manufacturing index is up barely 0.1 percent over year ago levels (July 2024: 99.4892 vs. July 2023: 99.4088). This is positive news. At 10.3% of the US economy, Manufacturing is holding up remarkably well despite higher costs for materials, talent, and financing.
Manufacturing Jobs
Non-Farm payrolls were revised down by 818,000 jobs, the largest such revision since 2009. The largest category was professional, and business services revised down by 358,000 jobs. Manufacturing jobs were revised down by 115,000. Our take, the numbers were revised down for the period of April 2023 through March 2024. Although this is a large revision downward, it is a lagging indicator based on educated guesses. It could be an indicator of larger economic movements to come but our business trends data is still positive for our industry so time will tell.
Cutting Tool Orders
US cutting tools orders in June totaled 208.1 million dollars down slightly, 2.9%, from May. Year-to-date orders are up 2.6% compared to the same period in 2023. Our take, cutting tools numbers are closely matching our expected growth in business trends. 2024 year end looks to be a good year, followed by a great 2025.
Machine Tools
Orders for machine tools grew by 4.3 percent in June, totaling 402.3 million dollars. Year-to-date machine tool orders when compared to 2023 are now only lagging 10.7 percent closing the gap. Our take, total units of machine tools were down but there was a significant uptick in average order cost well beyond inflation in the machine tool market. This may indicate more shops are investing in automation technologies and more expensive options rather than just buying volume of iron.
CRIBSHEET – #85 What ELSE to Look for When Choosing a Heat Treater
PMPA shares important precision machining information you may have missed while you were making essential parts.
August 9, 2024
3D Printing
ASTM creates a committee to establish best practices in 3d printing as well as audit procedures for AM based facilities. Representatives from Ford, Lockheed Martin, Honeywell, Raytheon and many other companies are participating in the cross-industry panel. Our take, building out best practices and materials studies to provide firm guidance on mechanical properties will help our shops determine ways to utilize additive manufacturing in innovative ways to serve our customers.
https://3dprinting.com/news/astm-launches-additive-manufacturing-certification-committee-initiative/
GitHub Pyhton Leak
Leaked access token to the GitHub Python repository discovered online. It would give a user elevated access to the Python Software Foundations repositories. Allowing an individual to carry out a large-scale attack by hiding malicious code in Python’s core libraries. Developers could unwittingly distribute malicious code to millions of users worldwide through normal software updates. Our take, protection of passwords and online cryptography keys are crucial to your cyber security. If your organization is managing several passwords and cryptography keys, password managers can provide secure storage for those increasing security.
https://www.schneier.com/blog/archives/2024/08/leaked-github-python-token.html
PODCAST – Rebooting Safety Programs
PODCAST – Taking Advantage of PMPA’s Updated ListServe Communities
PMPA shares important precision machining information you may have missed while you were making essential parts.
August 2, 2024
Durable Goods
New orders for manufactured durable goods in June, down after four consecutive monthly increases, decreased $18.6 billion or 6.6 percent to $264.5 billion, according to the U.S. Census Bureau. This follows a 0.1 percent increase in May. Excluding transportation, new orders actually increased 0.5 percent. Excluding defense, new orders decreased 7.0 percent. Transportation equipment, down two of the last three months, drove the decrease, $19.6 billion or 20.5 percent to $75.8 billion.
Link: https://www.census.gov/manufacturing/m3/adv/current/index.html
Our take: Transportation equipment, Particularly Light vehicles, is the largest market served by our Precision Turned Products Industry. If your June was “light,” the weakness in Transportation Equipment was likely the cause.
JOLTS
JOLTs Job Openings were unchanged in June at 8.2 million openings. New hires and total separations were little changed at 5.3 million and 5.1 million, respectively. Job openings in durable goods manufacturing decreased by 88,000. Our take, we are continuing to see an easing of the employment crisis. When there is less competition for talent it is much easier to find qualified candidates. We are well off the highs of 2022 but are still on a longer rising trend. Currently there are approximately 1.4 million more job openings than unemployed.
https://www.bls.gov/news.release/jolts.nr0.htm
Broken Windows
Microsoft confirms an update broke Windows Server. The update causes organizations serving over five hundred users to experience server crashes about every thirty minutes. Another update has caused Windows users to boot to bit locker recovery mode. Our take, it is imperative you have a consistent backup program. There have been three major incidents in the last month. Your data is critical to your organization, so you need both onsite and cloud-based backups to defend against outages malicious or not.
Personal Consumption
The personal consumption index in June came in at .1 percent, just above the expected 0 percent. Prices compared to the same month one year prior were up 2.5 percent. Core PCE, excluding food and energy, came in at .2 percent, just above the reading for May of .1 percent. Our take, prices have eased as the month-over-month trends have been neutral in the last couple of readings. Continued reductions in the monthly numbers will push the index within the Feds 2% goal.
https://www.bea.gov/news/2024/personal-income-and-outlays-june-2024
PODCAST – Do You Have a Quoting Process?
PODCAST – Taking Advantage of PMPA’s Updated ListServe Communities
PMPA shares important precision machining information you may have missed while you were making essential parts.
July 26, 2024
GDP
GDP for the second quarter increased at a 2.8% annualized pace adjusted for seasonality and inflation, beating economists’ expectations of 2.1%. Personal consumption was up 2.3% for the quarter. Our take, it is good news the consumer is still active. The consumer is the backbone of our economy. On the downside for those looking for interest rate cuts continued inflation and solid growth is going to push that out further.
https://www.bea.gov/data/gdp/gross-domestic-product
A.I.
Companies are now using AI to help program robots. Technology utilizing advanced sensors and AI is allowing real-time feedback for direct force control. Direct force control is a technology that allows robots to have dynamically controlled movements rather than static. Our take, AI is an exciting horizon that is allowing computers to calculate more complex tasks. Running simulations on a robot takes hundreds of hours from programmers and has your solution up and running faster.
https://www.amtonline.org/article/trends-in-utilizing-ai-to-complement-integrated-force-control
CrowdStrike Outage
CrowdStrike outage showed us all how fragile our interconnected world is. An update with bad code caused a cascading effect that behaved like a virus. Airlines cancelled flights, syndicated broadcasts went dead air, we could not get out drinks from the local gas station, for some it felt like everything was crumbling. The question is what are you doing now to change your systems to be unaffected by the next IT outage? How can your shop stay running if the internet were out for a week? Our parts are mission critical, so our systems must be built that way as well.
https://www.cnbc.com/2024/07/24/how-crowdstrike-caused-a-global-it-meltdown-and-what-comes-next.html
PODCAST – How To Beat The Heat
WEEKLY TIP – ARTICLE: Happy Workers are Good Workers
PMPA shares important precision machining information you may have missed while you were making essential parts.
July 19, 2024
Machine Tool Orders
Orders for machine tools grew 22 percent over April 2024 and 6.5 percent over May 2023. Demand for machine tools remains high even with elevated interest rates. Our take, growth in machine tools has slowed off the post pandemic highs but is steady which is what we see in our business trends reporting. The volatility is being squeezed out with the easing of the supply chain whip effects of the pandemic.
NY State Mfg Survey
“Business activity continued to decline modestly in New York State, according to firms responding to the July 2024 Empire State Manufacturing Survey. The headline general business conditions index was little changed at -6.6. New orders remained steady, while shipments inched just slightly higher. Delivery times shortened, and supply availability was unchanged. Inventories moved lower. Labor market conditions remained weak, with employment continuing to contract. Input prices increased modestly while selling price increases were quite minor. Firms were fairly optimistic that conditions would improve in the months ahead.”
Our take: Sometimes the news isn’t the news, but the lack of news. We are encouraged to see the words “modestly,” “little changed,” “steady,” “inched higher,” “shortened,” and “unchanged” in the NY Federal Reserve Banks Summary of business activity. Lack of volatility is as important a signal to our businesses as would be a huge exogenous event. We’ll take low volatility as an optimistic signal in July.
Link: https://www.newyorkfed.org/survey/empire/empiresurvey_overview
AT&T Hack
Massive hack to AT&T servers managed by Snowflake has exposed customer data including phone numbers, text messages, call logs, and other key information. This breach affects almost all of AT&T 242 million customers. Our take: we live in a connected world. Our company, personnel, and our personal data is everywhere on the internet. Snowflake has had several other breaches. With critical data it is important to not to just pick the lowest bidder but a competent partner in your cloud solutions.
https://www.cnbc.com/2024/07/12/snowflake-shares-slip-after-att-says-hackers-accessed-data.html
PODCAST – Is Utility What We Really Mean When We Say Value
WEEKLY TIP – CRIBSHEET : #116: Twist drills for success
PMPA shares important precision machining information you may have missed while you were making essential parts.
July 12, 2024
Cutting Tool Orders
US cutting tools orders rose 1.8 percent over May of 2023. Orders were down .1% from April of 2024 but have brought our year-to-date total up 4% over 2023. Our take, the steady growth in cutting tools is continued sign that our shops are busy but not frantic. Backlogs for cutting tools are coming down. It matches data from our own Business Trends survey showing shops are reducing overtime and working at a steady pace.
Small Business Report
Good news /Bad news characterizes the NFIB’s latest Small Business Optimism report.
The good news is that in June, the index reached its highest point in the year at 91.5, up one point from May. It was back December 2023 when the index was higher, at 91.9. the bad news? It has been 30 months since the index was at or above the historical average of 98.
Our Take: 30 months below average is our definition of Pessimism. Higher costs of compensation, inability to fill open positions, continued high prices, lower profit trends, and tight credit – with no relief in sight- all of these argue that Small Business pessimism is well founded.
Link: https://www.nfib.com/surveys/small-business-economic-trends/
Large Data Leak
On July 4th while we were celebrating a file was posted online containing just under 10 billion user credentials. This is the largest ever leaked compilation of passwords online. The list is a combination of some older lists already posted online and new data from resent hacks. Our take, an event like this is an ever-present reminder that we must be diligent in the creation of our online passwords. Reusing credentials can create devastating consequences that will ripple through an organization.
Vehicle Sales
In June 2024, the US sold 15.29 million vehicles, down from 15.91 million in May. Since 1976, the average monthly sales of vehicles in the US have been 14.80 million, with a peak of 21.71 million in October 2001 and a trough of 8.48 million in April 2020. Our take, vehicle sales was a slight miss from the consensus number but is still running above its long run average. Sales have been rising since the low in September 2021 but have trended mostly sideways since June 2023.
https://www.nada.org/nada/nada-data
PODCAST – Interview with CorpInfoTech (Speaking of Suppliers)
WEEKLY TIP – #129: How To Beat The Heat
PMPA shares important precision machining information you may have missed while you were making essential parts.
July 5, 2024
ISM PMI
Industry Week reported that the June Institute for Supply Management Purchasing Managers Index (ISM-PMI) continued its third consecutive month of decline, down 0.2 points from May. The Index was reported to be 48.5 in June.
Our take: Summer doldrums are probably not to blame here, but rather a rebalancing of supply and demand may be taking place. A ransomware attack on CDK Global crippled auto dealerships using CDK software June 18th, affecting sales in one of our largest markets served. Watch for PMPA’s Business Trends Report for insight into how our industry compares to the broader manufacturing industry.
JOLTS
Jolts job openings rose by 221,000 from April to 8.140 million in May 2024, beating the market consensus of 7.91 million. Our take, the labor market still is hot. We hear of layoffs and doom and gloom but the data is showing the market may be shifting to new kinds of employment.
Cutting Tool Orders
US cutting tool orders year to date rose just under 5% over 2023. April was 1.1% higher than in March and just above February making April the highest reading the index since August of 2023. Orders were 214.7 million in April pushing the 3-month moving average well above the 12 month trendline. Our take, this is good news in both that we are still seeing growth in the cutting tool market but also that the increases are more along the trendline. Wild upswings were from increased prices not growth.
New Orders
New Orders
The US Census reported today that new orders for manufactured goods in May, down following three consecutive monthly increases, decreased $3.0 billion or 0.5 percent to $583.1 billion. This followed a 0.4 percent April increase. Transportation drove the increase.
Shipments
Shipments, also down following three consecutive monthly increases, decreased $4.2 billion or 0.7 percent to $584.8 billion. This followed a 0.8 percent April increase. Transportation led the decrease.
Unfilled Orders
Unfilled orders, up forty-six consecutive months, increased once again by $3.1 billion or 0.2 percent to $1,402.8 billion. Transportation equipment, up forty-three of the last forty-four months, drove the increase, $3.4 billion or 0.4 percent to $909.0 billion.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/s-i-o.pdf
Our take: In Real Estate, it’s all about Location, Location, Location. The facts this month argue that for manufacturing, it is Transportation, transportation, transportation.
PODCAST – The Relationship Between Continuing Claims and Job Openings
WEEKLY TIP – #129: How To Beat The Heat
PMPA shares important precision machining information you may have missed while you were making essential parts.
June 21, 2024
Industrial Production
Manufacturing led the surge in Industrial Production for May 2024 , with an increase of 0.9 percent for both Manufacturing and the headline industrial production number.
Industrial production had declined in the prior two months. Compared to the year earlier level, Industrial production in May of 2024 was 0.4 percent higher, according to the Federal Reserve.
Seasonally adjusted gross value of Durable Goods for May was $565.6 Billion; up $8.9 billion from April. Automotive Products were $409.8 billion in May, up $5.9 billion over April.
Our take: PMPA’s Monthly Business Trends Report has been solidly positive all year, and this May Industrial Production report validates our continued optimism, despite higher borrowing costs and other factors.
Link: https://www.federalreserve.gov/releases/g17/current/
NY Mfg Index
The NY Empire State Manufacturing Index rose from -15.6 in May to -6 in June 2024 better than expected. It is the highest reading in four months, although it still pointing to a slight decline in manufacturing activity in the New York State. New orders held steady, while shipments inched higher. Delivery times shortened somewhat, and supply availability remained about the same. Our take, the index has moved a long way from the lows of -43.7 in January 2024 which was the lowest reading since COVID. It seems negative sentiment coming into 2024 weighed heavy on this indicator and the reality is it is not proving out.
https://www.newyorkfed.org/survey/empire/empiresurvey_overview
Cutting Tool Orders
US cutting tool orders year to date rose just under 5% over 2023. April was 1.1% higher than in March and just above February making April the highest reading the index since August of 2023. Orders were 214.7 million in April pushing the 3-month moving average well above the 12 month trendline. Our take, this is good news in both that we are still seeing growth in the cutting tool market but also that the increases are more along the trendline. Wild upswings were from increased prices not growth.
Machine Tool Orders
US machine tool orders totaled 317.9 million in April 2024. Decreasing 25.6% from March 2024 but only 5.4% behind April 2023. Year to date orders are lagging 2023 by 16.2%. Currently the West and Southeast regions are leading the charge with 30% and 15.4% growth over April 2023. Our take, machine tool orders tend to move in cycles. Coming off the historically large purchases in 2021 though 2022 a pull back is expected. April 2024 is running 12 month average.
Weekly Tip…
PODCAST – Ten Important Things to Know Before Working as a CNC Machinist
PODCAST – 2024 PMPA National Technical Conference Wrap Up
30 Potential Causes of Part Length Variation On Screw Machine Parts
PMPA shares important precision machining information you may have missed while you were making essential parts.
June 7, 2024
Job Openings
The number of job openings declined by 296,000 from the previous month to 8.059 million in April 2024, the lowest level since February 2021 and missing the market consensus of 8.34 million. Our take, a miss for the market but a good sign that the competition for employees is getting less fierce. Job openings are good for the economy, but having too many can cause price inflation. Cooling in this area will go a long way to brining prices under control.
https://www.bls.gov/news.release/jolts.nr0.htm
ISM PMI
According to PR Newswire the ISM PMI came in at 48.7 missing analysist expectations of 49.6. A decline for new orders, inventories, and backlog of orders. Production slowed from 51.3 to 50.2. Our take, the ISM has been bouncing around this area for since October of 2022. The recent trend over the last year is in the upward direction but in a slow rising trend line.
Cell Phone Security
Cybersecurity Best Practices for Our Phones- From NSA
Cybersecurity isn’t just about CMMC and server security. NSA has developed a list of mobile device best practices and the powering down once each week tops the list.
NSA Mobile Device Best Practices list
While rebooting your phone will not stop every attack, according to NSA’s Neal Zheng, Quoted in PC Magazine “”since a lot of modern cyberattacks are [a] chain of two, three, or even more vulnerabilities in a row that have to be successfully exploited…you can reset the adversary back to the beginning of that chain and force them to go through the whole thing again” by rebooting your device.”
PODCAST – Factors That Control The Change in Microstructures in Metals
CRIBSHEET – Why Do We Say Tenths Instead of Ten Thousandths
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 17, 2024
Core CPI
The Core CPI increased 0.3 percent in April in line with expectations, after rising 0.4 percent in March. Year over year the index increased 3.4 percent before seasonal adjustment. Our take, the month over month change has slowed to the lowest level since December 2023. The current .3 percent is still a 3.6 percent annual increase which is well above the targeted 2 percent. It will remain difficult for the Fed to decrease rates as CPI remains stubbornly high.
https://www.bls.gov/news.release/cpi.nr0.htm
Core PPI
Core PPI rose .5 percent in April well above the expected .2 percent. The March reading was revised downward from .2 percent to a decline of .1 percent. Year over year Core PPI increased 2.4 percent the largest increase since August of 2023. Our take, prices are remaining elevated, and it appears PPI is moving in the wrong direction. A downward revision from March helps current numbers average out with expectations, but the year over year number is a concerning indicator that prices are still moving up despite increased interest rates.
https://www.bls.gov/news.release/ppi.nr0.htm
Machine Tool Orders
Orders for machine tools increased by 25 percent in March over February 2024. Orders for machine tools year to date are down 21.3 percent over 2023. Orders from contract machine shop increased to highest level in 12 months. Our take, machine tool orders are lagging 2023 but we are starting to see growth again. Orders for contract shops increasing falls in line with our business trends showing shops have elevated expectations of sales and profitability over the next 3 months.
Consumer Sentiment
According to the US Bureau of Economic Analysis, (USBEA) first quarter 2024 Personal consumption expenditures represented nearly 68% of US GDP.
So the latest (preliminary) University of Michigan Consumer Sentiment Survey presents us with a warning. Consumer sentiment dropped 13% to a six-month low in May 2024, a significant 10-point decline after several consecutive months of stability. Compared to the prior month this was a drop of -12.7 percent; this is the lowest reading in six months. This downturn reflects widespread concerns across various demographics about rising inflation, unemployment and interest rates. Year ahead inflation expectations rose from 3.2 percent last month to 3.5 percent in May, remaining above the 2.3-3.0 percent range prior to the pandemic.
Link Consumer sentiment: http://www.sca.isr.umich.edu/
Link Consumer spending as percentage of GDP (authors calculations from Table 3): https://www.bea.gov/sites/default/files/2024-04/gdp1q24-adv.pdf
Our take: The role of the consumer as the ultimate foundation of economic activity makes this survey an important resource for anticipating business conditions going forward. This is not a call to alarm, but a sign that consuimers just might be finally seeing what the folks in the media have been trying to tell them with all of the negative headlines.
PODCAST – Sales Is Not a Sprint It’s a Marathon
.40 Carbon Steel Brinell Hardness vs. Tempering Temperature
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 10, 2024
Factory Orders, Shipments & Inventories
The monthly full report for New orders for manufactured goods in March, up two consecutive months, increased $9.1 billion or 1.6 percent to $584.5 billion, the U.S. Census Bureau reported. This followed a 1.2 percent February increase. Shipments, also up two consecutive months, increased $1.5 billion or 0.3 percent to $583.3 billion. This followed a 1.4 percent February increase. Inventories, up two consecutive months, increased $0.4 billion or virtually unchanged to $857.7 billion. This followed a 0.2 percent February increase.
Our take: If this is an economic slowdown, we’re a fan. New orders up is a leading indicator, Shipments up is a coincident indicator, and inventories remaining level tell us no need to panic about a slowdown suddenly appearing.
Link: https://www.census.gov/manufacturing/m3/current/index.html
World Steel Production
In March world steel production 161.2 million tons was down 4.3 percent from a year earlier. China was down 7.8 percent with the rest of the world rising .6 percent. Our take, China being the largest producer of steel pulled the index down. Europe outside of the EU has seen a 20.5% increase in production this year. The United States production was flat in March and is currently down about 1.6 percent for the year.
https://worldsteel.org/media/press-releases/2024/march-2024-crude-steel-production/
Monthly U.S International Trade in Goods & Services
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $69.4 billion in March, down $0.1 billion from $69.5 billion in February, revised.
March exports were $257.6 billion, $5.3 billion less than February exports. March imports were $327.0 billion, $5.4 billion less than February imports.
Capital Goods Imports (Census Basis, seasonally adjusted)in March were $75.7 billion were the highest on record.
March imports of other goods ($10.4 billion) were the lowest since December 2022 ($10.0 billion).
The March deficit with Mexico ($14.7 billion) was the highest on record.
Our Take: We believe that the correct reading of the facts for the goods and services deficit is “essentially unchanged.” We cannot decry the imports from Mexic being highest on record when we are trying as a matter of national security policy to decouple from China. Policy actions have consequences. Consequences inevitably show up in the data.
Links: https://www.census.gov/foreign-trade/current/index.html
https://www.census.gov/foreign-trade/statistics/highlights/PressHighlights.pdf
Microsoft Windows Server
A recent update to Microsoft‘s Windows Server can cause process crashes forcing the domain controller to reboot. This happens when the local security authority subsystem service crashes forcing the reboot. Our take, Microsoft is working on fixes for the problem. The April updates were critical security updates but if you are possibly vulnerable to the reboot issue in mission critical applications you might want to wait until the fixes are complete.
3D Printed Lathe
YouTuber Chris Borge has created a 3d printed lathe. The spindle is based around an ER Collet chuck and the bed is made from 80/20 channels. Our take, this is a cool use of 3d printing technology. A conversation starter that we thought would get you thinking.
https://www.youtube.com/watch?v=mA5jHT-Nwxs
PODCAST – 7 Little Known Regulations
STATE OF MANUFACTURING – Maine Manufacturing
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 3, 2024
ISM PMI
According to PR news the ISM Manufacturing PMI fell to 49.2 in April of 2024 from 50.3 in the earlier month, below market expectations. The number puts PMI back into a contractionary indicator failing to capitalize on the expansion indicated in March which was the first expansion in 16 months. Our take, PMI has been moving in the right direction but has a been a fickle indicator since September of last year bouncing from near expansion to contraction which is drawn as a sideways move. This indicates more uncertainty of the future but does not give us a solid trend to analyze. Although, the last 12 months do move in a slight upward trend.
Manufacturing PMI® at 49.2%; April 2024 Manufacturing ISM® Report On Business® (yahoo.com)
EPA Methylene Chloride Final Rule
We have not found the federal register notice, but we have seen an official press release announcement of the Banning of Methylene Chloride under TSCA. Methylene Chloride is used In shod=s for Parts cleaning, Degreasing as well as a component of many maintenance spray products and gasket removing products.
“Today, April 30, 2024, the U.S. Environmental Protection Agency finalized a ban on most uses of methylene chloride… EPA’s final action, also known as a risk management rule under the Toxic Substances Control Act (TSCA), requires companies to rapidly phase down manufacturing , processing, and distribution of methylene chloride for all consumer uses and most industrial and commercial uses, including its use in home renovations. Consumer use will be phased out within a year, and most industrial and commercial uses will be prohibited within two years.”
For more information contact Miles Free, Director of Industry Affairs at PMPA
Soo Locks
The Soo Locks provide critical trade infrastructure between Lake Superior and the lower great lakes. A critical component of those locks was failing after 60 years of service and the lead time for new castings was about 18 months. With a tight lead time the Army Core of Engineers was able to get the project done in 12 weeks using wire arc manufacturing, an additive process. Our take, it is time for us to open our perspective up to understand where additive can be a complement to our business infrastructure. Long lead times for castings and forgings can force us to look for alternatives. Additive manufacturing can be a good end solution or a gap solution until near net shapes are available.
USACE 3D Prints Largest-Ever Civil Works Component for Soo Locks – 3Dnatives
Job Openings
According to the U.S. Bureau of Labor Statistics , the number of U.S. job openings in manufacturing decreased in March. The number of job openings in the larger economy decreased slightly from 8.8 to approximately 8.5 million.
- There were 570,000 open positions in the U.S. manufacturing industry in March, down from an adjusted 587,000 in February.
- Open positions in durable goods manufacturing also declined, to 353,000 in March from an adjusted 379,000 in February.
Hires and quits: Hiring in the manufacturing sector remained level, with 323,000 in March (slightly down from February’s 324,000).
https://www.bls.gov/news.release/jolts.a.htm
A Little Cyber in Your Day
The United Health attack was implemented using the Citrix Bug. Hackers gain access by lacing webshells on vulnerable NetScalers to gain access. Installing the backdoors gives access to sensitive data and the ability launch further attacks. Our take, if you have not already insured your Citrix systems are up to date please double check all updates are complete. Also enable multi-factor authentication as it would have helped stop this type of attack. This attack specifically targets the NetScaler instances.
UnitedHealth hackers used stolen Citrix credentials, CEO says | Cybernews
PODCAST – Who is Your Best Trainer?
ARTICLE – Sales Is Not A Sprint, It’s A Marathon
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 19, 2024
Robotics
Robotics is on the brink of new breakthroughs as technology is getting cheaper. The components to build and utilize robotics are more prevalent in the marketplace. AI is making robotics easier to use and more capable. Simulation technology is allowing robots to learn tasks virtually tackling it in the real world. Our take, Technology is allowing automation to do tasks that were only a dream five years ago. Start asking questions as capabilities of robotics are growing and your next need may be more attainable than ever.
Industrial Production
Industrial production rose 0.4 percent in March but declined at an annual rate of 1.8 percent in the first quarter. Manufacturing output increased 0.5 percent in March, boosted in part by a gain of 3.1 percent in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3 percent. The indexes for durable manufacturing and nondurable manufacturing moved up 0.3 percent and 0.7 percent in March, respectively. Industrial Production remains unchanged compared to year earlier level at 102.7 percent of its 2017 average.
Capacity Utilization
Capacity utilization (broad industry) moved up to 78.4 percent in March, a rate that is 1.2 percentage points below its long-run (1972–2023) average. Capacity utilization for manufacturing moved up 0.3 percentage point in March to 77.4 percent, a rate that is 0.8 percentage point below its long-run average.
Link: https://www.federalreserve.gov/releases/g17/current/default.htm
Our take: The March Data for industrial production as a whole and for manufacturing, both Durable and Nondurables, continued to show positive trend. We look forward to our next PMPA Business Trends Report to confirm that our shops are participating in this positivity.
Deepfakes
As deepfakes become more mainstream the threat to business is becoming greater. The technology is now being used by bad actors to pose as real companies. Our take, A PMPA member company has recently a received false quote request from a legitimate buyer at a legitimate company. The request included prints, specifications, and quantity details. It was a fake request from a hacked account and got caught early. Be on the lookout for bad actors sending you false requests.
Machine Tool Orders
US machine tool orders increase 2.1% over January. Orders are down 16.9% YTD over 2023. With contract manufacturers, the largest purchaser of machine tools, reducing new orders. Our take, there has been a lot of purchases of new machine tools in the last few years. Higher interest rates are most likely weighing on new purchases as well as economic uncertainty.
National Technical Conference 2024
PODCAST – Deep Dive on Delegation
CRIBSHEET – PMPA Speaking of Precision Podcasts: Leadership
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 12, 2024
NFIB Small Business Optimism Index
The NFIB Small Business Optimism Index in the US fell for a third consecutive month to 88.5 in March 2024, the lowest since December 2012 and well below forecasts of 90.2. Our take, NFIB continues to highlight employment problems with 37 percent of companies reporting unfilled job openings. Almost half 48% reported few or no qualified applicants. Finally, 38 percent of companies reported they plan to raise compensation to find qualified applicants.
https://www.nfib.com/surveys/small-business-economic-trends/
https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/
D-link Devices
A researcher has found that over 92,000 D-link devices have a backdoor account. This is a new command injection and hardcoded backdoor flaw for multiple end-of-life D-link Network Attached Storage Devices or NAS. Our take, if you use D-link devices you need to check the device list provided in the link. There are currently no patches available to fix the vulnerability.
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S.
Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations
were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it.
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease.
New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January.
New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease.
Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent.
Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
Technical : AWWA CC Thread
Technical : Millipore testing
Corporate : Clean room- lessons learned, and those best avoided.
Corporate : FW: Monthly Manufacturing Policy Slide Deck – April 2024
National Technical Conference 2024
PODCAST – PMPA’s National Technical Conference 2024 – Collaborating For a Better Future
OSHA: Latest Updates (NTC 2023)
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 5, 2024
3D Printed Jet
A couple of stories that are not financial in nature.
A 3d printed jet engine was just test fired for the first time. The engine boasts 90% part consolidation when compared to traditional engine designs. The company went from design to finished engine in 16 months. Our take, this is an incredible achievement in rapid development. A process that could normally take decades has been shrunk to mere months. Our shops need to be nimble and flexible enough to prepare for opportunities that may arise from rapid development.
https://3dprinting.com/news/3d-printed-jet-engine-undergoes-first-test-firing/
Open Sourced AI
Companies are having disagreements over what open source AI really is. Traditionally open sourced software had source code published. Anyone could modify the code and republish as long as the project remained open. AI companies limit access to their models for certain purposes. Most AI companies do not openly publish code. Our take, open source has become a buzzword for AI. Although there are very few projects that follow open source principles. The majority of AI projects can be called “open use” because of the nature of their accessibility. OSI (Open Source Initiative) is looking to change that by creating a framework for determining if AI’s are truly open source.
https://www.technologyreview.com/2024/03/25/1090111/tech-industry-open-source-ai-definition-problem/
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease. New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January. New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease. Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent. Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
Technical : Induction Hardening Vendor
Technical : DFARS Compliance
Technical : Assistance with New Britain repair & troubleshooting
Technical : Machining Tantalum
Technical : Fusion 360 for CNC
HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
CRIBSHEET – No. 126: AISI System of Identification
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 29, 2024
Durable Goods
Durable Goods Surprising Positivity in February
The advance report on durable goods was issued by the US Census, and it was a positive report.
New Orders
New orders for manufactured durable goods in February increased $3.7 billion or 1.4 percent to $277.9 billion, reversing the two prior months decline. Excluding Transportation, New orders increased 0.5 percent. Excluding Defense, New orders increased 2.2 percent. Transportation equipment led the increase up $2.9 billion or 3.3 percent.
Shipments
Shipments of manufactured durable goods in February, increased $3.5 billion or 1.2 percent to $282.7 billion, dwarfing the 0.8 percent January decrease. Transportation equipment led the increase, increasing $3.4 billion or 4.0 percent to $89.8 billion.
Our take: The data speaks, and what we hear is that Transportation, a leading market for our shops, is reviving demand for component parts. This aligns well with the positive outlook from PMPA’s January Business Trends Report sentiment indicators.
Link: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
EEO-1
The Equal Employment Opportunity (EEO-1) report will be open for submission starting April 30, 2024. This report is an annual requirement for employers with over 100 employees and is submitted to the Equal Employment Opportunity Commission (EEOC). The deadline set by the commission for submission is June 4, 2024. It’s crucial to determine if you are required to file. If you have any questions, the online Filer Support Message Center will be available on Tuesday, April 30, 2024, to provide assistance regarding the 2023 collection.
Present Situation
For March 2024, The Conference board reported that the Present Situation Index- which reports on current conditions- increased 3.4 points from 147.6 to 151.0. This is a positive development. However, the Expectations Index, A short term look at income, business, and labor market expectations fell 2.5 points to 73.8. readings below 80 are said to possibly signal a recession.
Our take: We’ll take the upside on the mixed signals in this report. The data is clear that consumers note that their situations have improved in March. As for the expectation of possible recession, the most anticipated recession in my lifetime continues to stand up all of its forecasters. We’ll take the data like Durable goods that show us how the spending is trending positively in the economy.
Link: https://www.conference-board.org/topics/consumer-confidence
PMPA ListServe Community Topics
Technical : 6062-T6 Aluminum Source
Technical : Type III Cl 3 Hard Coat Anodize, black, Teflon
Technical : ERP Software
Technical : Quick test to determine 1215 from 12L14
Technical : LNS Tryton 112 Compatibility
RE: Technical : Turning Monel K500
Technical : Assistance with New Britain repair & troubleshooting
[PMPA Material & Equipment Exch] ITEM FOR SALE: 5/8″ Round 304L x 14ft
[PMPA Material & Equipment Exch] ITEM FOR SALE: Keyence Controller IM-6601E / Head IM-6120
[PMPA Material & Equipment Exch] ITEM FOR SALE: ACME GRIDLEY, MODEL 4” RB-8
CEO : Aluminum Extrusions- New Determinations from US Department of Commerce
CEO : FW: Monthly Workforce Grants/Incentives Tracking Matrix
Corporate : Aluminum Extrusions- New Determinations from US Department of Commerce
Corporate : Cryogenic Deburring of Plastic
HR : FW: Monthly Workforce Grants/Incentives Tracking Matrix
National Technical Conference 2024
The Point of the Tool Seldom Cuts
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 22, 2024
Cutting Tool Orders
Cutting tool orders came in at 204.5 million in January 2024. Orders were up 4.1% when compared with a year earlier and up 9.1% over December 2023. Our take, cutting tools had a nice finish last year. Cutting tool orders 12 month moving average is riding consistently above durable goods orders. The divergence started back in December of 2022 which correlates well with our business trends reports showing that we are outperforming broader industry.
Machine Tool Orders
January 2024 machine tool orders down 31% when compared to December 2023. Our take, the headline doesn’t tell the whole story. Purchases in December are always elevated as shops take advantage of end of year tax savings. Orders are only down 3.9% over January 2023 which was almost 17% above an average January. We are also coming of a December 2023 number that grew 12.6% over December 2022.
The Corporate Transparency Act
PMPA joins 125 National Associations Requesting Delay in CTA Implementation
The Corporate Transparency Act which specifically targets small businesses subjects covered entities and their “beneficial owners” to vague and complex reporting requirements while putting their sensitive personal information at risk. This was recently challenged in the courts. Bills to delay enforcement have been introduced in the Senate, S. 3625, the Protect Small Business and Prevent Illicit Financial Activity Act and the House. The House Bill (H.R. 5119), was adopted by the House of Representatives on a bipartisan vote of 420-1 on December 12, 2023. PMPA joined 125 other national associations in a letter calling for the Senate to delay the implementation of the CTA as it winds its way through the court challenges. Failure to comply with CTA requirements are felony violations, so this is critical. PMPA will keep you posted as this issue continues to develop.
Our Take: Beneficial owners can be any non equity owning employee that has the authority to make business decisions. The CTA requires submission personal identification for these employees on a government website. It is important to get the legality of this new rule squared away before charging small business job creators with felony paperwork violations.
PMPA ListServe Community Topics
Technical : Induction Hardening Vendor
Technical : DFARS Compliance
Technical : Assistance with New Britain repair & troubleshooting
Technical : Machining Tantalum
Technical : Fusion 360 for CNC
HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
Demand Drives May 2012 Precision Machining Industry Sales
PMPA shares important precision machining information you may have missed while you were making essential parts.
June 21, 2024
Industrial Production
Manufacturing led the surge in Industrial Production for May 2024 , with an increase of 0.9 percent for both Manufacturing and the headline industrial production number.
Industrial production had declined in the prior two months. Compared to the year earlier level, Industrial production in May of 2024 was 0.4 percent higher, according to the Federal Reserve.
Seasonally adjusted gross value of Durable Goods for May was $565.6 Billion; up $8.9 billion from April. Automotive Products were $409.8 billion in May, up $5.9 billion over April.
Our take: PMPA’s Monthly Business Trends Report has been solidly positive all year, and this May Industrial Production report validates our continued optimism, despite higher borrowing costs and other factors.
Link: https://www.federalreserve.gov/releases/g17/current/
NY Mfg Index
The NY Empire State Manufacturing Index rose from -15.6 in May to -6 in June 2024 better than expected. It is the highest reading in four months, although it still pointing to a slight decline in manufacturing activity in the New York State. New orders held steady, while shipments inched higher. Delivery times shortened somewhat, and supply availability remained about the same. Our take, the index has moved a long way from the lows of -43.7 in January 2024 which was the lowest reading since COVID. It seems negative sentiment coming into 2024 weighed heavy on this indicator and the reality is it is not proving out.
https://www.newyorkfed.org/survey/empire/empiresurvey_overview
Cutting Tool Orders
US cutting tool orders year to date rose just under 5% over 2023. April was 1.1% higher than in March and just above February making April the highest reading the index since August of 2023. Orders were 214.7 million in April pushing the 3-month moving average well above the 12 month trendline. Our take, this is good news in both that we are still seeing growth in the cutting tool market but also that the increases are more along the trendline. Wild upswings were from increased prices not growth.
Machine Tool Orders
US machine tool orders totaled 317.9 million in April 2024. Decreasing 25.6% from March 2024 but only 5.4% behind April 2023. Year to date orders are lagging 2023 by 16.2%. Currently the West and Southeast regions are leading the charge with 30% and 15.4% growth over April 2023. Our take, machine tool orders tend to move in cycles. Coming off the historically large purchases in 2021 though 2022 a pull back is expected. April 2024 is running 12 month average.
Weekly Tip…
PODCAST – Ten Important Things to Know Before Working as a CNC Machinist
PODCAST – 2024 PMPA National Technical Conference Wrap Up
30 Potential Causes of Part Length Variation On Screw Machine Parts
PMPA shares important precision machining information you may have missed while you were making essential parts.
June 7, 2024
Job Openings
The number of job openings declined by 296,000 from the previous month to 8.059 million in April 2024, the lowest level since February 2021 and missing the market consensus of 8.34 million. Our take, a miss for the market but a good sign that the competition for employees is getting less fierce. Job openings are good for the economy, but having too many can cause price inflation. Cooling in this area will go a long way to brining prices under control.
https://www.bls.gov/news.release/jolts.nr0.htm
ISM PMI
According to PR Newswire the ISM PMI came in at 48.7 missing analysist expectations of 49.6. A decline for new orders, inventories, and backlog of orders. Production slowed from 51.3 to 50.2. Our take, the ISM has been bouncing around this area for since October of 2022. The recent trend over the last year is in the upward direction but in a slow rising trend line.
Cell Phone Security
Cybersecurity Best Practices for Our Phones- From NSA
Cybersecurity isn’t just about CMMC and server security. NSA has developed a list of mobile device best practices and the powering down once each week tops the list.
NSA Mobile Device Best Practices list
While rebooting your phone will not stop every attack, according to NSA’s Neal Zheng, Quoted in PC Magazine “”since a lot of modern cyberattacks are [a] chain of two, three, or even more vulnerabilities in a row that have to be successfully exploited…you can reset the adversary back to the beginning of that chain and force them to go through the whole thing again” by rebooting your device.”
PODCAST – Factors That Control The Change in Microstructures in Metals
CRIBSHEET – Why Do We Say Tenths Instead of Ten Thousandths
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 17, 2024
Core CPI
The Core CPI increased 0.3 percent in April in line with expectations, after rising 0.4 percent in March. Year over year the index increased 3.4 percent before seasonal adjustment. Our take, the month over month change has slowed to the lowest level since December 2023. The current .3 percent is still a 3.6 percent annual increase which is well above the targeted 2 percent. It will remain difficult for the Fed to decrease rates as CPI remains stubbornly high.
https://www.bls.gov/news.release/cpi.nr0.htm
Core PPI
Core PPI rose .5 percent in April well above the expected .2 percent. The March reading was revised downward from .2 percent to a decline of .1 percent. Year over year Core PPI increased 2.4 percent the largest increase since August of 2023. Our take, prices are remaining elevated, and it appears PPI is moving in the wrong direction. A downward revision from March helps current numbers average out with expectations, but the year over year number is a concerning indicator that prices are still moving up despite increased interest rates.
https://www.bls.gov/news.release/ppi.nr0.htm
Machine Tool Orders
Orders for machine tools increased by 25 percent in March over February 2024. Orders for machine tools year to date are down 21.3 percent over 2023. Orders from contract machine shop increased to highest level in 12 months. Our take, machine tool orders are lagging 2023 but we are starting to see growth again. Orders for contract shops increasing falls in line with our business trends showing shops have elevated expectations of sales and profitability over the next 3 months.
Consumer Sentiment
According to the US Bureau of Economic Analysis, (USBEA) first quarter 2024 Personal consumption expenditures represented nearly 68% of US GDP.
So the latest (preliminary) University of Michigan Consumer Sentiment Survey presents us with a warning. Consumer sentiment dropped 13% to a six-month low in May 2024, a significant 10-point decline after several consecutive months of stability. Compared to the prior month this was a drop of -12.7 percent; this is the lowest reading in six months. This downturn reflects widespread concerns across various demographics about rising inflation, unemployment and interest rates. Year ahead inflation expectations rose from 3.2 percent last month to 3.5 percent in May, remaining above the 2.3-3.0 percent range prior to the pandemic.
Link Consumer sentiment: http://www.sca.isr.umich.edu/
Link Consumer spending as percentage of GDP (authors calculations from Table 3): https://www.bea.gov/sites/default/files/2024-04/gdp1q24-adv.pdf
Our take: The role of the consumer as the ultimate foundation of economic activity makes this survey an important resource for anticipating business conditions going forward. This is not a call to alarm, but a sign that consuimers just might be finally seeing what the folks in the media have been trying to tell them with all of the negative headlines.
PODCAST – Sales Is Not a Sprint It’s a Marathon
.40 Carbon Steel Brinell Hardness vs. Tempering Temperature
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 10, 2024
Factory Orders, Shipments & Inventories
The monthly full report for New orders for manufactured goods in March, up two consecutive months, increased $9.1 billion or 1.6 percent to $584.5 billion, the U.S. Census Bureau reported. This followed a 1.2 percent February increase. Shipments, also up two consecutive months, increased $1.5 billion or 0.3 percent to $583.3 billion. This followed a 1.4 percent February increase. Inventories, up two consecutive months, increased $0.4 billion or virtually unchanged to $857.7 billion. This followed a 0.2 percent February increase.
Our take: If this is an economic slowdown, we’re a fan. New orders up is a leading indicator, Shipments up is a coincident indicator, and inventories remaining level tell us no need to panic about a slowdown suddenly appearing.
Link: https://www.census.gov/manufacturing/m3/current/index.html
World Steel Production
In March world steel production 161.2 million tons was down 4.3 percent from a year earlier. China was down 7.8 percent with the rest of the world rising .6 percent. Our take, China being the largest producer of steel pulled the index down. Europe outside of the EU has seen a 20.5% increase in production this year. The United States production was flat in March and is currently down about 1.6 percent for the year.
https://worldsteel.org/media/press-releases/2024/march-2024-crude-steel-production/
Monthly U.S International Trade in Goods & Services
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $69.4 billion in March, down $0.1 billion from $69.5 billion in February, revised.
March exports were $257.6 billion, $5.3 billion less than February exports. March imports were $327.0 billion, $5.4 billion less than February imports.
Capital Goods Imports (Census Basis, seasonally adjusted)in March were $75.7 billion were the highest on record.
March imports of other goods ($10.4 billion) were the lowest since December 2022 ($10.0 billion).
The March deficit with Mexico ($14.7 billion) was the highest on record.
Our Take: We believe that the correct reading of the facts for the goods and services deficit is “essentially unchanged.” We cannot decry the imports from Mexic being highest on record when we are trying as a matter of national security policy to decouple from China. Policy actions have consequences. Consequences inevitably show up in the data.
Links: https://www.census.gov/foreign-trade/current/index.html
https://www.census.gov/foreign-trade/statistics/highlights/PressHighlights.pdf
Microsoft Windows Server
A recent update to Microsoft‘s Windows Server can cause process crashes forcing the domain controller to reboot. This happens when the local security authority subsystem service crashes forcing the reboot. Our take, Microsoft is working on fixes for the problem. The April updates were critical security updates but if you are possibly vulnerable to the reboot issue in mission critical applications you might want to wait until the fixes are complete.
3D Printed Lathe
YouTuber Chris Borge has created a 3d printed lathe. The spindle is based around an ER Collet chuck and the bed is made from 80/20 channels. Our take, this is a cool use of 3d printing technology. A conversation starter that we thought would get you thinking.
https://www.youtube.com/watch?v=mA5jHT-Nwxs
PODCAST – 7 Little Known Regulations
STATE OF MANUFACTURING – Maine Manufacturing
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 3, 2024
ISM PMI
According to PR news the ISM Manufacturing PMI fell to 49.2 in April of 2024 from 50.3 in the earlier month, below market expectations. The number puts PMI back into a contractionary indicator failing to capitalize on the expansion indicated in March which was the first expansion in 16 months. Our take, PMI has been moving in the right direction but has a been a fickle indicator since September of last year bouncing from near expansion to contraction which is drawn as a sideways move. This indicates more uncertainty of the future but does not give us a solid trend to analyze. Although, the last 12 months do move in a slight upward trend.
Manufacturing PMI® at 49.2%; April 2024 Manufacturing ISM® Report On Business® (yahoo.com)
EPA Methylene Chloride Final Rule
We have not found the federal register notice, but we have seen an official press release announcement of the Banning of Methylene Chloride under TSCA. Methylene Chloride is used In shod=s for Parts cleaning, Degreasing as well as a component of many maintenance spray products and gasket removing products.
“Today, April 30, 2024, the U.S. Environmental Protection Agency finalized a ban on most uses of methylene chloride… EPA’s final action, also known as a risk management rule under the Toxic Substances Control Act (TSCA), requires companies to rapidly phase down manufacturing , processing, and distribution of methylene chloride for all consumer uses and most industrial and commercial uses, including its use in home renovations. Consumer use will be phased out within a year, and most industrial and commercial uses will be prohibited within two years.”
For more information contact Miles Free, Director of Industry Affairs at PMPA
Soo Locks
The Soo Locks provide critical trade infrastructure between Lake Superior and the lower great lakes. A critical component of those locks was failing after 60 years of service and the lead time for new castings was about 18 months. With a tight lead time the Army Core of Engineers was able to get the project done in 12 weeks using wire arc manufacturing, an additive process. Our take, it is time for us to open our perspective up to understand where additive can be a complement to our business infrastructure. Long lead times for castings and forgings can force us to look for alternatives. Additive manufacturing can be a good end solution or a gap solution until near net shapes are available.
USACE 3D Prints Largest-Ever Civil Works Component for Soo Locks – 3Dnatives
Job Openings
According to the U.S. Bureau of Labor Statistics , the number of U.S. job openings in manufacturing decreased in March. The number of job openings in the larger economy decreased slightly from 8.8 to approximately 8.5 million.
- There were 570,000 open positions in the U.S. manufacturing industry in March, down from an adjusted 587,000 in February.
- Open positions in durable goods manufacturing also declined, to 353,000 in March from an adjusted 379,000 in February.
Hires and quits: Hiring in the manufacturing sector remained level, with 323,000 in March (slightly down from February’s 324,000).
https://www.bls.gov/news.release/jolts.a.htm
A Little Cyber in Your Day
The United Health attack was implemented using the Citrix Bug. Hackers gain access by lacing webshells on vulnerable NetScalers to gain access. Installing the backdoors gives access to sensitive data and the ability launch further attacks. Our take, if you have not already insured your Citrix systems are up to date please double check all updates are complete. Also enable multi-factor authentication as it would have helped stop this type of attack. This attack specifically targets the NetScaler instances.
UnitedHealth hackers used stolen Citrix credentials, CEO says | Cybernews
PODCAST – Who is Your Best Trainer?
ARTICLE – Sales Is Not A Sprint, It’s A Marathon
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 19, 2024
Robotics
Robotics is on the brink of new breakthroughs as technology is getting cheaper. The components to build and utilize robotics are more prevalent in the marketplace. AI is making robotics easier to use and more capable. Simulation technology is allowing robots to learn tasks virtually tackling it in the real world. Our take, Technology is allowing automation to do tasks that were only a dream five years ago. Start asking questions as capabilities of robotics are growing and your next need may be more attainable than ever.
Industrial Production
Industrial production rose 0.4 percent in March but declined at an annual rate of 1.8 percent in the first quarter. Manufacturing output increased 0.5 percent in March, boosted in part by a gain of 3.1 percent in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3 percent. The indexes for durable manufacturing and nondurable manufacturing moved up 0.3 percent and 0.7 percent in March, respectively. Industrial Production remains unchanged compared to year earlier level at 102.7 percent of its 2017 average.
Capacity Utilization
Capacity utilization (broad industry) moved up to 78.4 percent in March, a rate that is 1.2 percentage points below its long-run (1972–2023) average. Capacity utilization for manufacturing moved up 0.3 percentage point in March to 77.4 percent, a rate that is 0.8 percentage point below its long-run average.
Link: https://www.federalreserve.gov/releases/g17/current/default.htm
Our take: The March Data for industrial production as a whole and for manufacturing, both Durable and Nondurables, continued to show positive trend. We look forward to our next PMPA Business Trends Report to confirm that our shops are participating in this positivity.
Deepfakes
As deepfakes become more mainstream the threat to business is becoming greater. The technology is now being used by bad actors to pose as real companies. Our take, A PMPA member company has recently a received false quote request from a legitimate buyer at a legitimate company. The request included prints, specifications, and quantity details. It was a fake request from a hacked account and got caught early. Be on the lookout for bad actors sending you false requests.
Machine Tool Orders
US machine tool orders increase 2.1% over January. Orders are down 16.9% YTD over 2023. With contract manufacturers, the largest purchaser of machine tools, reducing new orders. Our take, there has been a lot of purchases of new machine tools in the last few years. Higher interest rates are most likely weighing on new purchases as well as economic uncertainty.
National Technical Conference 2024
PODCAST – Deep Dive on Delegation
CRIBSHEET – PMPA Speaking of Precision Podcasts: Leadership
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 12, 2024
NFIB Small Business Optimism Index
The NFIB Small Business Optimism Index in the US fell for a third consecutive month to 88.5 in March 2024, the lowest since December 2012 and well below forecasts of 90.2. Our take, NFIB continues to highlight employment problems with 37 percent of companies reporting unfilled job openings. Almost half 48% reported few or no qualified applicants. Finally, 38 percent of companies reported they plan to raise compensation to find qualified applicants.
https://www.nfib.com/surveys/small-business-economic-trends/
https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/
D-link Devices
A researcher has found that over 92,000 D-link devices have a backdoor account. This is a new command injection and hardcoded backdoor flaw for multiple end-of-life D-link Network Attached Storage Devices or NAS. Our take, if you use D-link devices you need to check the device list provided in the link. There are currently no patches available to fix the vulnerability.
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S.
Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations
were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it.
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease.
New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January.
New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease.
Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent.
Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
Technical : AWWA CC Thread
Technical : Millipore testing
Corporate : Clean room- lessons learned, and those best avoided.
Corporate : FW: Monthly Manufacturing Policy Slide Deck – April 2024
National Technical Conference 2024
PODCAST – PMPA’s National Technical Conference 2024 – Collaborating For a Better Future
OSHA: Latest Updates (NTC 2023)
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April 5, 2024
3D Printed Jet
A couple of stories that are not financial in nature.
A 3d printed jet engine was just test fired for the first time. The engine boasts 90% part consolidation when compared to traditional engine designs. The company went from design to finished engine in 16 months. Our take, this is an incredible achievement in rapid development. A process that could normally take decades has been shrunk to mere months. Our shops need to be nimble and flexible enough to prepare for opportunities that may arise from rapid development.
https://3dprinting.com/news/3d-printed-jet-engine-undergoes-first-test-firing/
Open Sourced AI
Companies are having disagreements over what open source AI really is. Traditionally open sourced software had source code published. Anyone could modify the code and republish as long as the project remained open. AI companies limit access to their models for certain purposes. Most AI companies do not openly publish code. Our take, open source has become a buzzword for AI. Although there are very few projects that follow open source principles. The majority of AI projects can be called “open use” because of the nature of their accessibility. OSI (Open Source Initiative) is looking to change that by creating a framework for determining if AI’s are truly open source.
https://www.technologyreview.com/2024/03/25/1090111/tech-industry-open-source-ai-definition-problem/
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease. New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January. New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease. Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent. Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
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HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
CRIBSHEET – No. 126: AISI System of Identification
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 29, 2024
Durable Goods
Durable Goods Surprising Positivity in February
The advance report on durable goods was issued by the US Census, and it was a positive report.
New Orders
New orders for manufactured durable goods in February increased $3.7 billion or 1.4 percent to $277.9 billion, reversing the two prior months decline. Excluding Transportation, New orders increased 0.5 percent. Excluding Defense, New orders increased 2.2 percent. Transportation equipment led the increase up $2.9 billion or 3.3 percent.
Shipments
Shipments of manufactured durable goods in February, increased $3.5 billion or 1.2 percent to $282.7 billion, dwarfing the 0.8 percent January decrease. Transportation equipment led the increase, increasing $3.4 billion or 4.0 percent to $89.8 billion.
Our take: The data speaks, and what we hear is that Transportation, a leading market for our shops, is reviving demand for component parts. This aligns well with the positive outlook from PMPA’s January Business Trends Report sentiment indicators.
Link: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
EEO-1
The Equal Employment Opportunity (EEO-1) report will be open for submission starting April 30, 2024. This report is an annual requirement for employers with over 100 employees and is submitted to the Equal Employment Opportunity Commission (EEOC). The deadline set by the commission for submission is June 4, 2024. It’s crucial to determine if you are required to file. If you have any questions, the online Filer Support Message Center will be available on Tuesday, April 30, 2024, to provide assistance regarding the 2023 collection.
Present Situation
For March 2024, The Conference board reported that the Present Situation Index- which reports on current conditions- increased 3.4 points from 147.6 to 151.0. This is a positive development. However, the Expectations Index, A short term look at income, business, and labor market expectations fell 2.5 points to 73.8. readings below 80 are said to possibly signal a recession.
Our take: We’ll take the upside on the mixed signals in this report. The data is clear that consumers note that their situations have improved in March. As for the expectation of possible recession, the most anticipated recession in my lifetime continues to stand up all of its forecasters. We’ll take the data like Durable goods that show us how the spending is trending positively in the economy.
Link: https://www.conference-board.org/topics/consumer-confidence
PMPA ListServe Community Topics
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RE: Technical : Turning Monel K500
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[PMPA Material & Equipment Exch] ITEM FOR SALE: 5/8″ Round 304L x 14ft
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CEO : FW: Monthly Workforce Grants/Incentives Tracking Matrix
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Corporate : Cryogenic Deburring of Plastic
HR : FW: Monthly Workforce Grants/Incentives Tracking Matrix
National Technical Conference 2024
The Point of the Tool Seldom Cuts
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 22, 2024
Cutting Tool Orders
Cutting tool orders came in at 204.5 million in January 2024. Orders were up 4.1% when compared with a year earlier and up 9.1% over December 2023. Our take, cutting tools had a nice finish last year. Cutting tool orders 12 month moving average is riding consistently above durable goods orders. The divergence started back in December of 2022 which correlates well with our business trends reports showing that we are outperforming broader industry.
Machine Tool Orders
January 2024 machine tool orders down 31% when compared to December 2023. Our take, the headline doesn’t tell the whole story. Purchases in December are always elevated as shops take advantage of end of year tax savings. Orders are only down 3.9% over January 2023 which was almost 17% above an average January. We are also coming of a December 2023 number that grew 12.6% over December 2022.
The Corporate Transparency Act
PMPA joins 125 National Associations Requesting Delay in CTA Implementation
The Corporate Transparency Act which specifically targets small businesses subjects covered entities and their “beneficial owners” to vague and complex reporting requirements while putting their sensitive personal information at risk. This was recently challenged in the courts. Bills to delay enforcement have been introduced in the Senate, S. 3625, the Protect Small Business and Prevent Illicit Financial Activity Act and the House. The House Bill (H.R. 5119), was adopted by the House of Representatives on a bipartisan vote of 420-1 on December 12, 2023. PMPA joined 125 other national associations in a letter calling for the Senate to delay the implementation of the CTA as it winds its way through the court challenges. Failure to comply with CTA requirements are felony violations, so this is critical. PMPA will keep you posted as this issue continues to develop.
Our Take: Beneficial owners can be any non equity owning employee that has the authority to make business decisions. The CTA requires submission personal identification for these employees on a government website. It is important to get the legality of this new rule squared away before charging small business job creators with felony paperwork violations.
PMPA ListServe Community Topics
Technical : Induction Hardening Vendor
Technical : DFARS Compliance
Technical : Assistance with New Britain repair & troubleshooting
Technical : Machining Tantalum
Technical : Fusion 360 for CNC
HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
Demand Drives May 2012 Precision Machining Industry Sales
PMPA shares important precision machining information you may have missed while you were making essential parts.
June 21, 2024
Industrial Production
Manufacturing led the surge in Industrial Production for May 2024 , with an increase of 0.9 percent for both Manufacturing and the headline industrial production number.
Industrial production had declined in the prior two months. Compared to the year earlier level, Industrial production in May of 2024 was 0.4 percent higher, according to the Federal Reserve.
Seasonally adjusted gross value of Durable Goods for May was $565.6 Billion; up $8.9 billion from April. Automotive Products were $409.8 billion in May, up $5.9 billion over April.
Our take: PMPA’s Monthly Business Trends Report has been solidly positive all year, and this May Industrial Production report validates our continued optimism, despite higher borrowing costs and other factors.
Link: https://www.federalreserve.gov/releases/g17/current/
NY Mfg Index
The NY Empire State Manufacturing Index rose from -15.6 in May to -6 in June 2024 better than expected. It is the highest reading in four months, although it still pointing to a slight decline in manufacturing activity in the New York State. New orders held steady, while shipments inched higher. Delivery times shortened somewhat, and supply availability remained about the same. Our take, the index has moved a long way from the lows of -43.7 in January 2024 which was the lowest reading since COVID. It seems negative sentiment coming into 2024 weighed heavy on this indicator and the reality is it is not proving out.
https://www.newyorkfed.org/survey/empire/empiresurvey_overview
Cutting Tool Orders
US cutting tool orders year to date rose just under 5% over 2023. April was 1.1% higher than in March and just above February making April the highest reading the index since August of 2023. Orders were 214.7 million in April pushing the 3-month moving average well above the 12 month trendline. Our take, this is good news in both that we are still seeing growth in the cutting tool market but also that the increases are more along the trendline. Wild upswings were from increased prices not growth.
Machine Tool Orders
US machine tool orders totaled 317.9 million in April 2024. Decreasing 25.6% from March 2024 but only 5.4% behind April 2023. Year to date orders are lagging 2023 by 16.2%. Currently the West and Southeast regions are leading the charge with 30% and 15.4% growth over April 2023. Our take, machine tool orders tend to move in cycles. Coming off the historically large purchases in 2021 though 2022 a pull back is expected. April 2024 is running 12 month average.
Weekly Tip…
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30 Potential Causes of Part Length Variation On Screw Machine Parts
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June 7, 2024
Job Openings
The number of job openings declined by 296,000 from the previous month to 8.059 million in April 2024, the lowest level since February 2021 and missing the market consensus of 8.34 million. Our take, a miss for the market but a good sign that the competition for employees is getting less fierce. Job openings are good for the economy, but having too many can cause price inflation. Cooling in this area will go a long way to brining prices under control.
https://www.bls.gov/news.release/jolts.nr0.htm
ISM PMI
According to PR Newswire the ISM PMI came in at 48.7 missing analysist expectations of 49.6. A decline for new orders, inventories, and backlog of orders. Production slowed from 51.3 to 50.2. Our take, the ISM has been bouncing around this area for since October of 2022. The recent trend over the last year is in the upward direction but in a slow rising trend line.
Cell Phone Security
Cybersecurity Best Practices for Our Phones- From NSA
Cybersecurity isn’t just about CMMC and server security. NSA has developed a list of mobile device best practices and the powering down once each week tops the list.
NSA Mobile Device Best Practices list
While rebooting your phone will not stop every attack, according to NSA’s Neal Zheng, Quoted in PC Magazine “”since a lot of modern cyberattacks are [a] chain of two, three, or even more vulnerabilities in a row that have to be successfully exploited…you can reset the adversary back to the beginning of that chain and force them to go through the whole thing again” by rebooting your device.”
PODCAST – Factors That Control The Change in Microstructures in Metals
CRIBSHEET – Why Do We Say Tenths Instead of Ten Thousandths
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 17, 2024
Core CPI
The Core CPI increased 0.3 percent in April in line with expectations, after rising 0.4 percent in March. Year over year the index increased 3.4 percent before seasonal adjustment. Our take, the month over month change has slowed to the lowest level since December 2023. The current .3 percent is still a 3.6 percent annual increase which is well above the targeted 2 percent. It will remain difficult for the Fed to decrease rates as CPI remains stubbornly high.
https://www.bls.gov/news.release/cpi.nr0.htm
Core PPI
Core PPI rose .5 percent in April well above the expected .2 percent. The March reading was revised downward from .2 percent to a decline of .1 percent. Year over year Core PPI increased 2.4 percent the largest increase since August of 2023. Our take, prices are remaining elevated, and it appears PPI is moving in the wrong direction. A downward revision from March helps current numbers average out with expectations, but the year over year number is a concerning indicator that prices are still moving up despite increased interest rates.
https://www.bls.gov/news.release/ppi.nr0.htm
Machine Tool Orders
Orders for machine tools increased by 25 percent in March over February 2024. Orders for machine tools year to date are down 21.3 percent over 2023. Orders from contract machine shop increased to highest level in 12 months. Our take, machine tool orders are lagging 2023 but we are starting to see growth again. Orders for contract shops increasing falls in line with our business trends showing shops have elevated expectations of sales and profitability over the next 3 months.
Consumer Sentiment
According to the US Bureau of Economic Analysis, (USBEA) first quarter 2024 Personal consumption expenditures represented nearly 68% of US GDP.
So the latest (preliminary) University of Michigan Consumer Sentiment Survey presents us with a warning. Consumer sentiment dropped 13% to a six-month low in May 2024, a significant 10-point decline after several consecutive months of stability. Compared to the prior month this was a drop of -12.7 percent; this is the lowest reading in six months. This downturn reflects widespread concerns across various demographics about rising inflation, unemployment and interest rates. Year ahead inflation expectations rose from 3.2 percent last month to 3.5 percent in May, remaining above the 2.3-3.0 percent range prior to the pandemic.
Link Consumer sentiment: http://www.sca.isr.umich.edu/
Link Consumer spending as percentage of GDP (authors calculations from Table 3): https://www.bea.gov/sites/default/files/2024-04/gdp1q24-adv.pdf
Our take: The role of the consumer as the ultimate foundation of economic activity makes this survey an important resource for anticipating business conditions going forward. This is not a call to alarm, but a sign that consuimers just might be finally seeing what the folks in the media have been trying to tell them with all of the negative headlines.
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PMPA shares important precision machining information you may have missed while you were making essential parts.
May 10, 2024
Factory Orders, Shipments & Inventories
The monthly full report for New orders for manufactured goods in March, up two consecutive months, increased $9.1 billion or 1.6 percent to $584.5 billion, the U.S. Census Bureau reported. This followed a 1.2 percent February increase. Shipments, also up two consecutive months, increased $1.5 billion or 0.3 percent to $583.3 billion. This followed a 1.4 percent February increase. Inventories, up two consecutive months, increased $0.4 billion or virtually unchanged to $857.7 billion. This followed a 0.2 percent February increase.
Our take: If this is an economic slowdown, we’re a fan. New orders up is a leading indicator, Shipments up is a coincident indicator, and inventories remaining level tell us no need to panic about a slowdown suddenly appearing.
Link: https://www.census.gov/manufacturing/m3/current/index.html
World Steel Production
In March world steel production 161.2 million tons was down 4.3 percent from a year earlier. China was down 7.8 percent with the rest of the world rising .6 percent. Our take, China being the largest producer of steel pulled the index down. Europe outside of the EU has seen a 20.5% increase in production this year. The United States production was flat in March and is currently down about 1.6 percent for the year.
https://worldsteel.org/media/press-releases/2024/march-2024-crude-steel-production/
Monthly U.S International Trade in Goods & Services
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $69.4 billion in March, down $0.1 billion from $69.5 billion in February, revised.
March exports were $257.6 billion, $5.3 billion less than February exports. March imports were $327.0 billion, $5.4 billion less than February imports.
Capital Goods Imports (Census Basis, seasonally adjusted)in March were $75.7 billion were the highest on record.
March imports of other goods ($10.4 billion) were the lowest since December 2022 ($10.0 billion).
The March deficit with Mexico ($14.7 billion) was the highest on record.
Our Take: We believe that the correct reading of the facts for the goods and services deficit is “essentially unchanged.” We cannot decry the imports from Mexic being highest on record when we are trying as a matter of national security policy to decouple from China. Policy actions have consequences. Consequences inevitably show up in the data.
Links: https://www.census.gov/foreign-trade/current/index.html
https://www.census.gov/foreign-trade/statistics/highlights/PressHighlights.pdf
Microsoft Windows Server
A recent update to Microsoft‘s Windows Server can cause process crashes forcing the domain controller to reboot. This happens when the local security authority subsystem service crashes forcing the reboot. Our take, Microsoft is working on fixes for the problem. The April updates were critical security updates but if you are possibly vulnerable to the reboot issue in mission critical applications you might want to wait until the fixes are complete.
3D Printed Lathe
YouTuber Chris Borge has created a 3d printed lathe. The spindle is based around an ER Collet chuck and the bed is made from 80/20 channels. Our take, this is a cool use of 3d printing technology. A conversation starter that we thought would get you thinking.
https://www.youtube.com/watch?v=mA5jHT-Nwxs
PODCAST – 7 Little Known Regulations
STATE OF MANUFACTURING – Maine Manufacturing
PMPA shares important precision machining information you may have missed while you were making essential parts.
May 3, 2024
ISM PMI
According to PR news the ISM Manufacturing PMI fell to 49.2 in April of 2024 from 50.3 in the earlier month, below market expectations. The number puts PMI back into a contractionary indicator failing to capitalize on the expansion indicated in March which was the first expansion in 16 months. Our take, PMI has been moving in the right direction but has a been a fickle indicator since September of last year bouncing from near expansion to contraction which is drawn as a sideways move. This indicates more uncertainty of the future but does not give us a solid trend to analyze. Although, the last 12 months do move in a slight upward trend.
Manufacturing PMI® at 49.2%; April 2024 Manufacturing ISM® Report On Business® (yahoo.com)
EPA Methylene Chloride Final Rule
We have not found the federal register notice, but we have seen an official press release announcement of the Banning of Methylene Chloride under TSCA. Methylene Chloride is used In shod=s for Parts cleaning, Degreasing as well as a component of many maintenance spray products and gasket removing products.
“Today, April 30, 2024, the U.S. Environmental Protection Agency finalized a ban on most uses of methylene chloride… EPA’s final action, also known as a risk management rule under the Toxic Substances Control Act (TSCA), requires companies to rapidly phase down manufacturing , processing, and distribution of methylene chloride for all consumer uses and most industrial and commercial uses, including its use in home renovations. Consumer use will be phased out within a year, and most industrial and commercial uses will be prohibited within two years.”
For more information contact Miles Free, Director of Industry Affairs at PMPA
Soo Locks
The Soo Locks provide critical trade infrastructure between Lake Superior and the lower great lakes. A critical component of those locks was failing after 60 years of service and the lead time for new castings was about 18 months. With a tight lead time the Army Core of Engineers was able to get the project done in 12 weeks using wire arc manufacturing, an additive process. Our take, it is time for us to open our perspective up to understand where additive can be a complement to our business infrastructure. Long lead times for castings and forgings can force us to look for alternatives. Additive manufacturing can be a good end solution or a gap solution until near net shapes are available.
USACE 3D Prints Largest-Ever Civil Works Component for Soo Locks – 3Dnatives
Job Openings
According to the U.S. Bureau of Labor Statistics , the number of U.S. job openings in manufacturing decreased in March. The number of job openings in the larger economy decreased slightly from 8.8 to approximately 8.5 million.
- There were 570,000 open positions in the U.S. manufacturing industry in March, down from an adjusted 587,000 in February.
- Open positions in durable goods manufacturing also declined, to 353,000 in March from an adjusted 379,000 in February.
Hires and quits: Hiring in the manufacturing sector remained level, with 323,000 in March (slightly down from February’s 324,000).
https://www.bls.gov/news.release/jolts.a.htm
A Little Cyber in Your Day
The United Health attack was implemented using the Citrix Bug. Hackers gain access by lacing webshells on vulnerable NetScalers to gain access. Installing the backdoors gives access to sensitive data and the ability launch further attacks. Our take, if you have not already insured your Citrix systems are up to date please double check all updates are complete. Also enable multi-factor authentication as it would have helped stop this type of attack. This attack specifically targets the NetScaler instances.
UnitedHealth hackers used stolen Citrix credentials, CEO says | Cybernews
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ARTICLE – Sales Is Not A Sprint, It’s A Marathon
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 19, 2024
Robotics
Robotics is on the brink of new breakthroughs as technology is getting cheaper. The components to build and utilize robotics are more prevalent in the marketplace. AI is making robotics easier to use and more capable. Simulation technology is allowing robots to learn tasks virtually tackling it in the real world. Our take, Technology is allowing automation to do tasks that were only a dream five years ago. Start asking questions as capabilities of robotics are growing and your next need may be more attainable than ever.
Industrial Production
Industrial production rose 0.4 percent in March but declined at an annual rate of 1.8 percent in the first quarter. Manufacturing output increased 0.5 percent in March, boosted in part by a gain of 3.1 percent in motor vehicles and parts; factory output excluding motor vehicles and parts moved up 0.3 percent. The indexes for durable manufacturing and nondurable manufacturing moved up 0.3 percent and 0.7 percent in March, respectively. Industrial Production remains unchanged compared to year earlier level at 102.7 percent of its 2017 average.
Capacity Utilization
Capacity utilization (broad industry) moved up to 78.4 percent in March, a rate that is 1.2 percentage points below its long-run (1972–2023) average. Capacity utilization for manufacturing moved up 0.3 percentage point in March to 77.4 percent, a rate that is 0.8 percentage point below its long-run average.
Link: https://www.federalreserve.gov/releases/g17/current/default.htm
Our take: The March Data for industrial production as a whole and for manufacturing, both Durable and Nondurables, continued to show positive trend. We look forward to our next PMPA Business Trends Report to confirm that our shops are participating in this positivity.
Deepfakes
As deepfakes become more mainstream the threat to business is becoming greater. The technology is now being used by bad actors to pose as real companies. Our take, A PMPA member company has recently a received false quote request from a legitimate buyer at a legitimate company. The request included prints, specifications, and quantity details. It was a fake request from a hacked account and got caught early. Be on the lookout for bad actors sending you false requests.
Machine Tool Orders
US machine tool orders increase 2.1% over January. Orders are down 16.9% YTD over 2023. With contract manufacturers, the largest purchaser of machine tools, reducing new orders. Our take, there has been a lot of purchases of new machine tools in the last few years. Higher interest rates are most likely weighing on new purchases as well as economic uncertainty.
National Technical Conference 2024
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April 12, 2024
NFIB Small Business Optimism Index
The NFIB Small Business Optimism Index in the US fell for a third consecutive month to 88.5 in March 2024, the lowest since December 2012 and well below forecasts of 90.2. Our take, NFIB continues to highlight employment problems with 37 percent of companies reporting unfilled job openings. Almost half 48% reported few or no qualified applicants. Finally, 38 percent of companies reported they plan to raise compensation to find qualified applicants.
https://www.nfib.com/surveys/small-business-economic-trends/
https://www.nfib.com/foundations/research-center/monthly-reports/jobs-report/
D-link Devices
A researcher has found that over 92,000 D-link devices have a backdoor account. This is a new command injection and hardcoded backdoor flaw for multiple end-of-life D-link Network Attached Storage Devices or NAS. Our take, if you use D-link devices you need to check the device list provided in the link. There are currently no patches available to fix the vulnerability.
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S.
Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations
were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it.
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease.
New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January.
New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease.
Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent.
Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
Technical : AWWA CC Thread
Technical : Millipore testing
Corporate : Clean room- lessons learned, and those best avoided.
Corporate : FW: Monthly Manufacturing Policy Slide Deck – April 2024
National Technical Conference 2024
PODCAST – PMPA’s National Technical Conference 2024 – Collaborating For a Better Future
OSHA: Latest Updates (NTC 2023)
PMPA shares important precision machining information you may have missed while you were making essential parts.
April 5, 2024
3D Printed Jet
A couple of stories that are not financial in nature.
A 3d printed jet engine was just test fired for the first time. The engine boasts 90% part consolidation when compared to traditional engine designs. The company went from design to finished engine in 16 months. Our take, this is an incredible achievement in rapid development. A process that could normally take decades has been shrunk to mere months. Our shops need to be nimble and flexible enough to prepare for opportunities that may arise from rapid development.
https://3dprinting.com/news/3d-printed-jet-engine-undergoes-first-test-firing/
Open Sourced AI
Companies are having disagreements over what open source AI really is. Traditionally open sourced software had source code published. Anyone could modify the code and republish as long as the project remained open. AI companies limit access to their models for certain purposes. Most AI companies do not openly publish code. Our take, open source has become a buzzword for AI. Although there are very few projects that follow open source principles. The majority of AI projects can be called “open use” because of the nature of their accessibility. OSI (Open Source Initiative) is looking to change that by creating a framework for determining if AI’s are truly open source.
https://www.technologyreview.com/2024/03/25/1090111/tech-industry-open-source-ai-definition-problem/
Manufacturing Job Openings
The number of job openings changed little at 8.8 million on the last business day of February, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations were little changed at 5.8 million and 5.6 million, respectively.
For manufacturing, Openings in February were 583,000, down 13,000 from January 2023, and down 91,000 from February 2023. Job openings for Durable goods manufacturing were 361,000 in February 2024, up 13,000 from January 2024.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
Our take: Little change, overall, but Durable Goods manufacturing, Our industry showed a 13,000, or 3.7 percent increase over January. We’ll take it
Factory Orders and Shipments
New orders for manufactured goods in February, up following two consecutive monthly decreases, increased $8.2 billion or 1.4 percent to $576.8 billion, according to the U.S. Census Bureau. This followed a 3.8 percent January decrease. New orders for durable goods manufacturing were up $3.517 Billion or 1.3 percent to $277.7 after declining 6.9 percent in January. New orders for fabricated metal products manufacturing were up $272 million or 0.8 percent over January 2024.
https://www.census.gov/manufacturing/m3/prel/pdf/table2p.pdf
Our take: New Orders reversed their downward two month trend, turning to the positive, aligning with our Sentiment indicators in February Business Trends Report. With new orders for all manufacturing up 1.0 percent, durable goods manufacturing up 1.8 percent, and fabricated metals up 5.6 percent Our shops are outperforming.
Shipments of manufactured goods, also up following two consecutive monthly decreases, increased $8.0 billion or 1.4 percent to $581.6 billion in February 2024. This followed a 0.8 percent January decrease. Shipments of manufactured durable goods increased 1.2 percent in February to $282.6 billion, a dramatic reversal from the December to January decline of 0.7 percent. Shipments of manufactured Fabricated metals increased 0.5 percent to 36.4 billion, following the prior months 1.3 percent decrease.
Link: https://www.census.gov/manufacturing/m3/prel/pdf/table1p.pdf
Our take: Shipments are not as positive as new orders- but give us a measure of just how much more busy our shops will be in the months ahead.
Summary release link: https://www.census.gov/manufacturing/m3/current/index.html
PMPA ListServe Community Topics
Technical : Induction Hardening Vendor
Technical : DFARS Compliance
Technical : Assistance with New Britain repair & troubleshooting
Technical : Machining Tantalum
Technical : Fusion 360 for CNC
HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
CRIBSHEET – No. 126: AISI System of Identification
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 29, 2024
Durable Goods
Durable Goods Surprising Positivity in February
The advance report on durable goods was issued by the US Census, and it was a positive report.
New Orders
New orders for manufactured durable goods in February increased $3.7 billion or 1.4 percent to $277.9 billion, reversing the two prior months decline. Excluding Transportation, New orders increased 0.5 percent. Excluding Defense, New orders increased 2.2 percent. Transportation equipment led the increase up $2.9 billion or 3.3 percent.
Shipments
Shipments of manufactured durable goods in February, increased $3.5 billion or 1.2 percent to $282.7 billion, dwarfing the 0.8 percent January decrease. Transportation equipment led the increase, increasing $3.4 billion or 4.0 percent to $89.8 billion.
Our take: The data speaks, and what we hear is that Transportation, a leading market for our shops, is reviving demand for component parts. This aligns well with the positive outlook from PMPA’s January Business Trends Report sentiment indicators.
Link: https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf
EEO-1
The Equal Employment Opportunity (EEO-1) report will be open for submission starting April 30, 2024. This report is an annual requirement for employers with over 100 employees and is submitted to the Equal Employment Opportunity Commission (EEOC). The deadline set by the commission for submission is June 4, 2024. It’s crucial to determine if you are required to file. If you have any questions, the online Filer Support Message Center will be available on Tuesday, April 30, 2024, to provide assistance regarding the 2023 collection.
Present Situation
For March 2024, The Conference board reported that the Present Situation Index- which reports on current conditions- increased 3.4 points from 147.6 to 151.0. This is a positive development. However, the Expectations Index, A short term look at income, business, and labor market expectations fell 2.5 points to 73.8. readings below 80 are said to possibly signal a recession.
Our take: We’ll take the upside on the mixed signals in this report. The data is clear that consumers note that their situations have improved in March. As for the expectation of possible recession, the most anticipated recession in my lifetime continues to stand up all of its forecasters. We’ll take the data like Durable goods that show us how the spending is trending positively in the economy.
Link: https://www.conference-board.org/topics/consumer-confidence
PMPA ListServe Community Topics
Technical : 6062-T6 Aluminum Source
Technical : Type III Cl 3 Hard Coat Anodize, black, Teflon
Technical : ERP Software
Technical : Quick test to determine 1215 from 12L14
Technical : LNS Tryton 112 Compatibility
RE: Technical : Turning Monel K500
Technical : Assistance with New Britain repair & troubleshooting
[PMPA Material & Equipment Exch] ITEM FOR SALE: 5/8″ Round 304L x 14ft
[PMPA Material & Equipment Exch] ITEM FOR SALE: Keyence Controller IM-6601E / Head IM-6120
[PMPA Material & Equipment Exch] ITEM FOR SALE: ACME GRIDLEY, MODEL 4” RB-8
CEO : Aluminum Extrusions- New Determinations from US Department of Commerce
CEO : FW: Monthly Workforce Grants/Incentives Tracking Matrix
Corporate : Aluminum Extrusions- New Determinations from US Department of Commerce
Corporate : Cryogenic Deburring of Plastic
HR : FW: Monthly Workforce Grants/Incentives Tracking Matrix
National Technical Conference 2024
The Point of the Tool Seldom Cuts
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 22, 2024
Cutting Tool Orders
Cutting tool orders came in at 204.5 million in January 2024. Orders were up 4.1% when compared with a year earlier and up 9.1% over December 2023. Our take, cutting tools had a nice finish last year. Cutting tool orders 12 month moving average is riding consistently above durable goods orders. The divergence started back in December of 2022 which correlates well with our business trends reports showing that we are outperforming broader industry.
Machine Tool Orders
January 2024 machine tool orders down 31% when compared to December 2023. Our take, the headline doesn’t tell the whole story. Purchases in December are always elevated as shops take advantage of end of year tax savings. Orders are only down 3.9% over January 2023 which was almost 17% above an average January. We are also coming of a December 2023 number that grew 12.6% over December 2022.
The Corporate Transparency Act
PMPA joins 125 National Associations Requesting Delay in CTA Implementation
The Corporate Transparency Act which specifically targets small businesses subjects covered entities and their “beneficial owners” to vague and complex reporting requirements while putting their sensitive personal information at risk. This was recently challenged in the courts. Bills to delay enforcement have been introduced in the Senate, S. 3625, the Protect Small Business and Prevent Illicit Financial Activity Act and the House. The House Bill (H.R. 5119), was adopted by the House of Representatives on a bipartisan vote of 420-1 on December 12, 2023. PMPA joined 125 other national associations in a letter calling for the Senate to delay the implementation of the CTA as it winds its way through the court challenges. Failure to comply with CTA requirements are felony violations, so this is critical. PMPA will keep you posted as this issue continues to develop.
Our Take: Beneficial owners can be any non equity owning employee that has the authority to make business decisions. The CTA requires submission personal identification for these employees on a government website. It is important to get the legality of this new rule squared away before charging small business job creators with felony paperwork violations.
PMPA ListServe Community Topics
Technical : Induction Hardening Vendor
Technical : DFARS Compliance
Technical : Assistance with New Britain repair & troubleshooting
Technical : Machining Tantalum
Technical : Fusion 360 for CNC
HR : ITAR US Person Compliance Best Practices
National Technical Conference 2024
Demand Drives May 2012 Precision Machining Industry Sales
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 15, 2024
CPI
CPI Increased .4 percent in February over the previous month which met expectations. Year over year CPI rose 3.2 percent. Our take, this is the highest month over month number since August of 2023. Even though the annual increase has settled around the 3 percent range we still have a way to go to get to the target of 2 percent if the month over month numbers remain stubbornly high.
https://www.bls.gov/news.release/cpi.nr0.htm
NFIB Optimism Index
Small Business Sentiment, measured by The National Federation of Small Business fell in February, according to their report published March 12, 2024.
The optimism index fell to 89.4, its 26th straight month below its 50-year average of 98, and its lowest level since May 2023.
The big news in this report was higher prices and interest costs replacing labor quality as the top concern of respondents. Labor quality as the single most important issue fell 5 points to 16 percent, its lowest level since April 2020, during the onset of the COVID-19 Response. Twenty-three percent of small business owners reported inflation as their most important problem, according to the report.
Our take: Small business owners continue to be pessimistic about prospects, based on decaying indicators from Government and Private agencies. In this report, NFIB determined that nearly 39 percent of randomly selected respondents expect economic conditions to further decline. Remember that these indicators are subordinate to actual bookings, and sales data, but keep them in mind, if only to see how advantaged your shop is con=mpared to the broader manufacturing sector. PMPA’s last Monthly Business Trends Index remains positive.
Link: https://www.nfib.com/surveys/small-business-economic-trends/
New Orders
New Orders for manufactured durable goods in January were down three of the last four months and decreased 6.1 percent. Shipments of manufactured durable goods in January were down four of the last five months and decreased 0.9 percent which followed a 0.6 percent December decrease. Transportation led the declines in both cases. Our Take? PMPA’s Business Trends report for January 2024 increased 2.8 percent in January, despite our workproduct largely consumed by Durable Goods markets. We believe that our index leads Durable goods- without our components, they can not ship.
NFIB Small Business Optimism Falls in February
Small Business Sentiment, measured by The National Federation of Small Business fell in February, according to their report published March 12, 2024.
The optimism index fell to 89.4, its 26th straight month below its 50-year average of 98, and its lowest level since May 2023.
The big news in this report was higher prices and interest costs replacing labor quality as the top concern of respondents. Labor quality as the single most important issue fell 5 points to 16 percent, its lowest level since April 2020, during the onset of the COVID-19 Response. Twenty-three percent of small business owners reported inflation as their most important problem, according to the report.
Our take: Small business owners continue to be pessimistic about prospects, based on decaying indicators from Government and Private agencies. In this report, NFIB determined that nearly 39 percent of randomly selected respondents expect economic conditions to further decline. Remember that these indicators are subordinate to actual bookings, and sales data, but keep them in mind, if only to see how advantaged your shop is con=mpared to the broader manufacturing sector. PMPA’s last Monthly Business Trends Index remains positive.
Link: https://www.nfib.com/surveys/small-business-economic-trends/
Jolts
Jolts job openings dropped by 26,000 in the most recent survey to 8.863 million openings. The lowest level in three months. Our take, this is further evidence that the pool of available talent is increasing, if at least temporarily. Unfilled positions should start becoming easier to fill. Demographically we are still headed toward less workers than open positions in the long run.
ICYMI LISTSERVE COMMUNITY TOPICS THIS WEEK
Induction Hardening Vendors
DFARS Compliance
Assistance with New Britain repair and troubleshooting
Machining Tantalum
Fusion 360 for CNC
TAR US Person Compliance Best Practices
Why Tool Life Can Vary: Carbon and Alloy Steels
PMPA shares important precision machining information you may have missed while you were making essential parts.
March 8, 2024
PCE Price Index
The annual PCE price index dropped to 2.4 percent in January from the December 2.62 percent reading. This is the lowest reading since around February of 2021. Our take, there are good signs that the rate increases have done their job to cool inflation. The PCE has a long-term average of about 3.3 percent since 1960. Continued readings around 2 or just under are best for price stability.
https://www.bea.gov/news/2024/personal-income-and-outlays-january-2024
Corporate Transparency Act
Just this week a federal judge in the Northern District Court In Alabama ruled that the Corporate Transparency Act is unconstitutional.
News reports state that enforcement has been halted- for now. It is far too soon to declare a victory- but this is an important first step in the legal fight that is certain to develop.
At this time, the ruling holds only for the plaintiffs.
Our take: There is a long legal battle ahead. PMPA member companies should still understand the rule, determine who in their organization is likely to be considered “Beneficial Owners,” and prepare to comply so if that the Act is ultimately upheld, you will be prepared to file by the January 1, 2025 deadline. We are keeping this one on our short list.
Durable Goods
New Orders for manufactured durable goods in January, down three of the last four months, decreased $18.0 billion or 6.1 percent to $276.7 billion.
Shipments of manufactured durable goods in January, down four of the last five months, decreased $2.4 billion or 0.9 percent to $279.0 billion. This followed a 0.6 percent December decrease.
Transportation led the declines in both cases.
Our Take: PMPA’s Business trends report for January 2024 increased 2.8 percent in January, despite our workproduct largely consumed by Durable Goods markets. We believe that our index leads Durable goods- without our components, they can not ship.
Link: https://www.census.gov/manufacturing/m3/adv/current/index.html
Private Manufacturing Construction
Private Manufacturing Construction rose 2.1 percent to $224.947 Billion over December’s $220.394 billion. It is the largest category of spend in the non-residential sector. As we have noted before the rise of Private Manufacturing construction is a positive indicator for future manufacturing business for our shops as work returns from overseas.
Our take: It is impossible to overdramatize the significance of this indicator. The January 2024 Private construction spend of $224.947 billion dollars is up $60.3 billion, or 36.6 percent above the January 2023 level. We should be preparing for dramatic increases in demand for our precision products as these new facilities come on line.
ISM PMI
According to FXStreet the ISM PMI index declined to 47.8 in February vs the January 49.1 reading. The February number is also well below market expectations of 49.5. New orders and employment were dragging the index down. Our take, the ISM is indicating a slowing in manufacturing overall but according to our Business Trends reports our industry is currently in overdrive. With reshoring in full swing our shops are expecting good things to come with 3 of the four sentiment indicators making positive moves and sales remaining level at a very high value for January. January 2024 also tied for the 2nd highest January in our dataset.
ICYMI LISTSERVE COMMUNITY TOPICS THIS WEEK
Corporate : Looking for 1035 steel
Corporate : FW: Franklin Manufacturing Policy Monthly Slide Deck – March 2024
Corporate : Anyone got any connections that can explain INCOTERMS?
Quality : Calibration equipment for ring gages and plug gages
Technical : Seeking Potential suppliers of Aluminum Extrusion
Technical : Best Practice for Cleaning Shavings
PODCAST – How Do You Know What To Do Next
Why Lead Is NOT An Alloying Element In Steel
PMPA shares important precision machining information you may have missed while you were making essential parts.
Feb 23, 2024
Manufacturing Production – January Blues
Winter Weather was named as a negative factor in the January Manufacturing Production Report issued by the Federal Reserve Tuesday, February 20, 2024.
“Industrial production edged down 0.1 percent in January after recording no change in December. In January, manufacturing output declined 0.5 percent; the index for durable manufacturing edged up 0.1 percent, while the index for nondurable manufacturing fell 1.1 percent.
Among durables, the largest gains were recorded in electrical equipment, appliances, and components as well as in aerospace and miscellaneous transportation equipment. Computer and electronic products also moved up in January.
Our take: From January 2023 to January 2024 the Manufacturing Index declined 0.9 percent. Defense and Space Equipment continue to be a strong market according to Chart 2.
Link: https://www.federalreserve.gov/releases/g17/Current/g17.pdf
Cutting Tool Orders
Cutting tool orders came in at $187.9 Million in December 2023 down 7.3% from November 2023. Orders in December were down slightly, .3%, from December 2022. The year end total for 2023 was up 6.9% over 2022. Our take, last year was a steady growth year for cutting tools. Inflation has cooled in the cutting too market which is good news for our shops bottom lines.
Consumer Sentiment
Cutting tool orders came in at $187.9 Million in December 2023 down 7.3% from November 2023. Orders in December were down slightly, .3%, from December 2022. The year end total for 2023 was up 6.9% over 2022. Our take, last year was a steady growth year for cutting tools. Inflation has cooled in the cutting too market which is good news for our shops bottom lines.
Our take: in the dismal science of Economics, even a very slight change of $0.1 billion can both be “virtually unchanged” and a “new record high.” We’ll stick to making parts that are critical for human safety and quality of life applications, and leave the economics to the pros.
Link: https://www.census.gov/economic-indicators/
click on press release for Advance Report Durable goods.
Machine Tool Orders
Machine tool orders beat expectations in December 2023 increasing nearly 22% over the prior month. The reading came in about 12% above the December 2022. Our take, this is a positive sign for our industry. Shops increasing orders of machine tools correlates with our December business trends report showing strong positive sales expectations going into 2024.
PODCAST – Onshoring Weather Report: Strong Tailwinds!
PMPA shares important precision machining information you may have missed while you were making essential parts.
Feb 2, 2024
Tax Win
Wednesday night was a win for our industry. The House of Representatives passed the bipartisan tax bill that would undo the tax increases that began taking effect on January 1, 2022, under the Tax Cuts and Jobs Act. The Tax Relief for American Families and Workers Act of 2024 delays the R&D amortization provision until 2026 and reinstates full expensing, restores full expensing for capital investments, reinstates the EBITDA standard for interest deductibility, and increases the limitations on expensing under Section 179. This bill has everything PMPA lobbied for during our December 2023 fly-in: an R&D tax fix, restoring 100% expensing, and incentivizing investment in U.S. manufacturing. Over the past two weeks, PMPA members made their voices heard to get this victory in the House, so thank you to the many members who attended the fly-in and those who sent messages to their Representatives to urge support and passage of these vital tax provisions. Now we must continue our efforts if we want to cut our taxes and invest in the U.S. by pushing the Senate to take up and pass the bill immediately. Contact your Senators TODAY and urge them to support and pass the bipartisan Tax Relief for American Families and Workers Act of 2024.
Link: https://www.census.gov/manufacturing/m3/current/index.html#
Rate Status
The Federal Reserve voted to maintain rates this week. According to the FOMC statement “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.” Our take, the Fed will not provide another dot plot till the March meeting. The main quote from their statement indicates rates will not be going lower until they are sure inflation is settled into a long-term 2 percent range. With the latest CPI unadjusted coming in at 3.4 it may be a while before rates come down.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20240131a.htm
https://www.federalreserve.gov/newsevents/pressreleases/monetary20240131a1.htm
Consumer Confidence
“The Conference Board Consumer Confidence Index® rose in January to 114.8 (1985=100), up from a revised 108.0 in December. The reading was the highest since December 2021, and marked the third straight monthly increase.” If that isn’t enough positivity, here’s what they have to say about the present situation: “The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—surged to 161.3 (1985=100) from 147.2 last month.”
Link: https://www.conference-board.org/topics/consumer-confidence
Our take: Consumer spending is the foundation of the U.S. Economy, And so any sense of consumer attitude that may be driving their spending can be a helpful indicator. When we hear “highest since” and “surged to” we take notice. Do you?
Durable Manufactured Goods
When does “Flat” mean “New Record High?
When the US Census bureau reports new orders for durable goods. In its January 25 release, They report “New orders for manufactured durable goods in December, up three of the last four months, increased $0.1
billion or virtually unchanged to $295.6 billion… Excluding transportation, new orders increased 0.6 percent.”
here’s where it gets interesting Chad Moutray, Chief Economist at NAM noted in his Monday email “(durable goods)… increased 0.6% to a new record high with transportation equipment excluded.”
For the year, transportation excluded, the increase was 0.8 percent.
Our take: in the dismal science of Economics, even a very slight change of $0.1 billion can both be “virtually unchanged” and a “new record high.” We’ll stick to making parts that are critical for human safety and quality of life applications, and leave the economics to the pros.
Link: https://www.census.gov/economic-indicators/ click on press release for Advance Report Durable goods.
JOLTS
Jolts job openings jumped by 101,000 in December. The December reading was the highest in the last three months beating market expectations. The South region saw the largest increase in openings. Our take, all the doom and gloom talk about layoffs in the news doesn’t fit well with the numbers. We have over 9 million jobs open currently, and that number has been rising since October 2023.
https://www.bls.gov/news.release/jolts.nr0.htm
PODCAST – Goals and Achievements for 2024
Why Service Trumps Quality And Price
PMPA shares important precision machining information you may have missed while you were making essential parts.
Jan 12, 2024
Manufactured Optimism
New orders for manufactured goods in November, up three of the last four months, increased $14.9 billion or 2.6 percent to $592.9 billion, the U.S. Census Bureau reported today. This followed a 3.4 percent October decrease. Shipments, up following two consecutive monthly decreases, increased $2.7 billion or 0.5 percent to $580.7 billion.
New orders for manufactured durable goods in November, up two of the last three months, increased $15.0 billion or 5.4 percent to $295.2 billion, unchanged from the previously published increase. This followed a 5.1 percent October decrease. Transportation equipment, also up two of the last three months, led the increase, $14.3 billion or 15.3 percent to $107.8 billion. New orders for manufactured nondurable goods were essentially unchanged.
Our take: New Orders for Manufactured Goods increasing is a promising indicator for our shops in the months ahead. Increase in Manufactured durable goods especially so. While the talking heads predict a bumpy economy in 2024, the data at hand suggest our shops will continue to make essential products.
Link: https://www.census.gov/manufacturing/m3/current/index.html#
International Container Rates Set to Rise Almost 100%
The Journal of Commerce reports that due to disruptions in the Red Sea, “Container lines are quoting spot rates of $5000 per FEU to the US west coast, almost twice the current rate, effective January 15, 2024.” They report “average spot rates jumping more than $500 per FEU in early January as measured by Drewry.” Link requires a subscription: https://www.joc.com/article/carriers-quoting-trans-pac-rates-5000feu-suez-linked-equipment-imbalances_20240105.html
Our take: This development is also a positive for our Manufacturing shops as it makes the cost of imports more expensive. Another tailwind for Reshoring.
World Steel Production
World steel production increased by 3.3% in November over the previous year. Total steel production year to date was up point 5% through the end of November. China increased only 1.5% over the previous year. China is still by far the largest producer of steel in total, but their influence is starting to slow. India made the largest gains at 12.1 percent, increasing their output to just over 7% of global production. The US saw a slight decrease in production of point 5% but is still on track to produce the equivalent of ton produced in 2022.
National Association of Manufacturer’s Outlook Survey
The National Association of Manufacturer’s Outlook Survey for the fourth quarter showed the small business sentiment outlook rising slightly from the third quarter in 2023. Survey participants cited taxes, workforce issues, and political turmoil
as top contributors to their pessimism. Survey positives included an expected growth in prices received for products is expected to rise 1.3% and inventories are expected to fall by 1.7%. Our take? While NAM sees declining inventories as a negative factor, application of lean is a positive in our shops by reducing inventory costs. There were fewer companies expecting a recession in this survey than in 3rd quarter. We expect even greater positive sentiment in Quarter 1 as Automotive manufacturing normalizes.
LockBit
Ransomware gang, LockBit, is going back to the drawing board and looking at new tactics to increase ransom revenue. This group has been responsible for attacks against IK Royal Mail and Japan’s largest port. Attackers are expected to ask victims for 3-10% of annual sales for companies making up 100 million dollars. Obviously our shops
can’t throw away 10% of annual sales on a ransom It is a new year and time to make sure your systems are up to date. Make sure you have regularly scheduled training for your performers.
PMPA shares important precision machining information you may have missed while you were making essential parts.
Jan 6, 2024
Manufacturing – More Good News!
Manufacturing – More Good News!
Construction Spending on Manufacturing is a solid portent for more business for our shops.
It can explain why we are so positive about the activity of our shops in the years ahead. The new manufacturing facilities being built now will need our precision components. Here is a chart from the Federal reserve showing almost hockey stock growth of total construction spending in the US $209 billion dollars by November 2023 up $136,225 billion from the $73,553 billion invested in November of 2020.
Link: https://fred.stlouisfed.org/series/TLMFGCONS
Economic Positivity
New Residential Construction
New Residential Construction is considered to be a leading indicator for our shops, as it leads the purchase of light trucks by contractors and workmen as well as durable goods and HVAC and other systems that require our parts.
Starts
In November, privately owned housing starts jumped almost 15 percent (14.8% to be precise) to 1,560,000 units. This is up 9.3 percent over the November 2022 value.
Single family housing starts increased 18% to 1,143,000.
Multi family (Buildings with five or more units) was 404,900.
Completions
In November, privately owned housing completions were up 5.0 percent above the revised October value, coming in at 1,447,000. While positive month to month, the rate was down 6.2 percent compared to November 2022.
Link: https://www.census.gov/construction/nrc/current/index.html
Job Openings
Jolts job openings slightly lower than market expectations coming in at 8.79 million just below the consensus of 8.85million. It is 62,000 less openings than reported in October 2023. This is the 3rd consecutive month of declines in job openings. Our take, this is continued good news that the job market is finally starting to ease a bit. This will continue to put downward pressure on wage inflation. With less openings there will be more qualified candidates looking for your positions.
Link: https://www.bls.gov/news.release/jolts.nr0.htm
ISM PMI
According to PR Newswire the ISM PMI came in at 47.4% in December 2023 up from 46.7 in November. Beating market expectations of 47.1 PMI is headed in the right direction. PMI is still indicating contraction but can indicate a beginning of expansion when the index moves above 48.7 for an extended period. Our take, it is good to see PMI bouncing back. This is the 3rd highest recorded PMI in 11 months. A few more good readings may be an indication of turn around after the index has been declining since late 2022.