While manufacturing growth remains essentially level, certain sectors served by the precision machining industry grew nicely in the year ending in April 2016.
Dr. Chad Moutray, Chief Economist at National Association of Manufacturers, has compiled and shared the data for the past year in Manufacturing.
The sector in which Precision Machining is classified – Fabricated metal- shows a minus 3% growth for the period of April 2015- April 2016, the fact is that our shops also provide engineered components for Motor Vehicles and Parts (up 4.3%) Miscellaneous Durable Goods (up 5.2%) and Computer and Electronic Products (up 2.9%)
While the actual Year-Over-Year Growth for Manufacturing eked out a 0.5% growth rate, there were clearly winning and losing sectors as the chart above shows.
Here is a recap of the markets typically served by our precision machining shops: Machinery, Fabricated Metal, Aerospace and Miscellaneous Transportation Equipment, and Electrical Equipment and Appliances were down, while Miscellaneous Durable Goods, Motor Vehicles and Parts, Computer and Electronic Products showed gains ranging from 2.9%- 5.2%.
According to Dr. Moutray, manufacturing rebounded somewhat in April, as manufacturing production grew 0.3 percent, just offsetting the 0.3 percent decline in March. In April, renewed strength in the Machinery sector (up 2.4%) and Motor Vehicles and Parts sectors (up 1.3%) were positive signs.
According to the FED, April Industrial Production moved upward by 0.7 percent, after two months of decline.
The PMPA Business Trends Index of Sales for April 2016 declined from the year’s March high 0f 131 to April’s 122. That 122 reading is up one point from the 2015 calendar year average.
While the economic news is not bubbling with enthusiastic reports of growth, we think that the industry operating even or just above last year’s average is a positive story.
It sure beats the alternative…
Tag: Computer and Electronic Products
We learned with painful social and economic clarity in the great recession of 2008-2009 that it is demand, and not supply, that drives our economy.
So what are the top 10 demanded U.S. manufactured exports?
- Transportation Equipment
- Chemicals
- Machinery
- Computer and Electronic Products
- Petroleum and Coal Products
- Food
- Primary Metal
- Medical Equipment, Sporting Goods, and Miscellaneous
- Fabricated Metal Products
- Electrical Equipment
(source: Brookings EXPORT NATION 2012)
Here is what the report had to say about Manufacturing:
“Manufacturing comprised the majority of U.S. exports in 2010. While on a declining trend as a share of U.S. exports, manufacturing has seen a comeback in the first year of recovery. About 61 percent of U.S. exports, manufacturing industries produced three-quarters of the additional U.S. sales abroad between 2009 and 2010. The sector’s sales abroad increased by 14.5 percent and expanded faster than U.S. exports overall. Machinery, transportation equipment, and chemicals delivered one-half of manufacturing exports growth.”
“Manufacturing contributed disproportionately to export recovery in the large metros (metropolitan areas). While manufacturing accounted for 59 percent of the exports sold by industries located in the large metros in 2010, it delivered almost 76 percent of the exports growth in these metros. Midwestern metros illustrated this trend, with 85 percent of their exports growth generated by manufacturing industries.”
“Manufacturing industries delivered the majority of export sales growth in 94 out of the largest 100 metros in 2010.”
Precision machining companies produce components that are key to functionality of transportation equipment, machinery, computers and electronic products, medical equipment, and electrical equipment.
Our parts are used to harvest, process, and package food, and to produce and refine petroleum and coal products.
We are a sub-industry of Fabricated Metals- number 9 on the list.
What are USA’s Top 10 Manufactured Exports?
They are all items that would not be exportable if it were not for the role of our precision machined products.
Why does manufacturing – especially precision machined manufacturing- matter?
Ask an economist.
Or look at exports.