The Momentary State of American Manufacturing is Mixed
Here are a few items that give us a snapshot of American manufacturing.
First, on the national level, data provider Markit’s Flash Purchasing Managers’ Index shows manufacturing strength. “It was the third month in a row of consecutive gains in the index, with stronger sales pushing sentiment higher,” writes Chad Moutray, chief economist for the National Association of Manufacturers.
What about at the regional level? Recent reports from a number of regional Federal Reserve banks found weakness in the manufacturing sector, however Jon Hurdle’s reporting found optimism among Philadelphia manufacturers:
Most Philadelphia-area manufacturers are seeing growing orders and are generally upbeat about 2013 as business confidence improves despite underlying worries about the federal budget and the national economy, executives said.
Makers of trash and recycling compactors, office furniture and corrugated cardboard say they are seeing broad-based growth from clients ranging from retailers to architects and industrial distributors.
But a maker of semiconductor-manufacturing equipment said orders have slowed sharply in the last 60 days, while a company that makes components for solar-cell manufacturers reported an ongoing decline in sales because of fierce competition from China.
Still, many local manufacturers have entered the New Year with strong order books, and are now willing to invest to build on that growth, said Steve Jurash, president of the Manufacturing Alliance of Philadelphia, a trade association.
"I believe overall Philadelphia manufacturing ended the calendar year showing strong growth," Jurash said. "Manufacturing growth is proportionate to the amount of investment they make, willingness to innovate and ability to lean their processes out.
As for manufacturers who are doing well, at the Automate 2013 robotics trade show in Chicago, two small businesses talked about how they’re successfully using robots to compete against tough global competition:
“Automation has allowed us to compete on a global basis. It has absolutely created jobs in southwest Michigan,” said Matt Tyler, chief executive of Vickers Engineering, an auto parts supplier. “Had it not been for automation, we would not have beat our Japanese competitor; we would not have beat our Chinese competitor; we would not have beat our Mexican competitor. It’s a fact.”
Also making the case was Drew Greenblatt, the widely quoted president and owner of Marlin Steel, a Baltimore manufacturer of steel products that has managed to expand and add jobs by deploying robots and other machines to increase worker productivity.
“In December, we won a job from a Chicago company that for over a decade has bought from China,” he said. “It’s a sheet-metal bracket; 160,000 sheet-metal brackets, year in, year out. They were made in China, now they’re made in Baltimore, using steel from a plant in Indiana and the robot was made in Connecticut.”
To sum it up, while there's mixed signals about the sector, manufacturers are finding opportunities to succeed in this challenging economy.