Tag: Bullish on Precision Machining in 2017

Being Bullish on Our Business is No Bull!

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Being bullish on precision manufacturing is a logical conclusion from the strength of these just released economic indicators.
 

The data gives strength to the bull for precision manufacturing.

The PMPA Business Trends Report has a sentiment indicator for Sales for three months ahead. In January 2017, that indicator exploded, up 40% from December’s already optimistic number. (see the blue line on the chart below.)
Sentiment for sales up 40% since last report!

But don’t take our word for it. Here are 7 economic indicators released last week that are at multi year highs:

  • Consumer Price Index (CPI) up 2.8% year over year in February, up from 0.9% in July and at a pace not seen since February 2012;
  • Producer Price Index (PPI) up 2.2% year over year, Highest year over year rate since May 2014;
  • Manufacturing Production up 0.5% in February. Manufacturing Output is up 1.2% over the last 12 months, fastest pace since April 2015;
  • Housing Market Index  hit a 12 year high, its highest level since June 2005;
  • Housing starts rose 3.0% in February. Single Family housing starts jumped from 819,000 to 872,000 a pace unseen since October 2007;
  • Index of Consumer Sentiment from University of Michigan was close to January’s reading which was the best reading for this indicator in 13 years;
  • Retail sales were reported at 5.7 % just below January’s 6.0% year over year pace, highest since 2012.

The weight of the evidence is clear.
The weight of the evidence makes it difficult to be anything but bullish on our business prospects.
What are YOU doing to take advantage of the opportunities that this strong economy is providing for YOUR precision machining shop?
Data courtesy Chad Moutray Ph.D., CBE, Chief Economist at National Association of Manufacturers Monday Economic Report
 

Precision Machining Industry 2017 Forecast- Strongly Positive

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PMPA’s December 2016 Business Trends Review and Summary showed our Industry shipments declined about 3.3% year over year. The index fell to 117 (Just 0.6 below the trailing five year average!) but down from 2015’s 121.
That was last year. What does 2017 look like for our precision machining shops?

Sentiment for Sales up sharply for first three months of 2017.
Expectations for Sales of Precision Machined Products are  up sharply for first three months of 2017.

 
According to PMPA’s Business Trends Report: Net Sales outlook for precision machined products exploded in this month’s survey with fifty-four percent of respondents expecting sales to increase in the first three months of 2017, and thirty-eight percent  expect sales to remain level.  Ninety-two percent of our shop respondents expect sales to remain level or increase in the next three months. All other sentiment indicators were positive as well: Lead Time, Employment, and Profitability.
PMPA members get the Business Trends Report monthly to help them calibrate to sales, hours scheduled, and outlook for Sales, Lead Time, Employment and Profitability of their peers.
What indicators do you use to make sense of the market  each month?