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Will US Manufacturing Rebound Continue?

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SoCalPE
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Gold
Slow and Steady
SoCalPE   7/8/2011 6:18:07 PM
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In the Los Angeles, CA area (where I live) there continues to be positive signs of economic improvement.  While job growth is not particularly strong, manufacturing company activity has increased.  I work with CNC shops and sheet metal fabricators and both have told me that orders are stronger than the last two quarters.  This is great considering that a lot of the manufacturing in this area was driven by the local aerospace industry which is all but a shadow of its former self.  I remain fervently optimistic about our manufacturing future!

Douglas Smock
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Platinum
The Bottom Line? Cash
Douglas Smock   7/5/2011 8:27:48 PM
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I think Raj Batra makes the key point--American companies are still hoarding cash. The economy won't move strongly until CEOs have confidence and move cash out of investment accounts. The other big problem is continuing difficulty in raising capital in the USA for business development.

sensor pro
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Gold
Re: Triple Dip Recession
sensor pro   7/5/2011 3:09:27 PM
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I honestly hope that the economy will improve and manufacturing will rise. I do see some small movement on the market, but with the general activity in NASA going down and the construction industry at its lowest state I'm not too optimistic.

I see that proportinally we see larger increase from foreign companies. For some reason US orders are not coming as fast as i would hope for.

 

 

Greg Stirling
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Triple Dip Recession
Greg Stirling   7/5/2011 3:02:57 PM
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Being a small business owner, I constantly have to try to predict the demand for factory automation.  Mid 09 was the bottom of the economy, and the same for the machine design and the equipment building industry. 

I have scaled back from 30 contractors to just a few and recently went verticle to include previously outsourced services to reduce costs even further. 

It is safe to say we are working twice as hard for half the money.  This last winter and spring demand was very low. 

Now things are starting to pick up, so we are cautiously optimistic, but staying in our defensive position until the workload becomes overwhelming.  When that happens we will go back to using established contractors and services...

Rob Spiegel
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Blogger
Re: Slow but sure
Rob Spiegel   7/5/2011 1:56:52 PM
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A couple years ago someone cracked that we'll know the economy is growing when we see a hiring boom in China. With our current slow growth, apparently companies don't have to hire in order to meet demand. There are probably a number of reasons for this. 1) increased automation, 2) part-time or contract workers, 3) outsourcing. I would expect we will soon see productivity gains. So far it hasn't appeared. But it's bound to rise as companies meet increased demand without significant hiring. We've been sitting around 2 percent productivity gains for about a year. When we start seeing 3 or 4 percent, there will be pressure to hire.

Alexander Wolfe
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Re: Slow but sure
Alexander Wolfe   7/5/2011 1:22:15 PM
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The hardest part of assessing what's going on is separating wishful thinking from a dispassionate analysis of the numbers. The latter, I fear, tells us that there may be a rebound for vendors. However, given the general reluctance of companies to add headcount -- the Siemens example above excepted -- for engineers the rebound may be more muted. Of course, if the recovery becomes robust enough, companies will be forced to hire.

Charles Murray
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Slow but sure
Charles Murray   7/5/2011 12:52:48 PM
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Year-to-date auto sales are up over 2010, although June was a bad month. As Rob says, the overall economy is growing, albeit slowly: From today's Wall Street Journal: ""...this recovery may remain lackluster for years, many economists say, because of heavy household debt, a financial system still damaged by the mortgage crisis, fragile confidence..."

Rob Spiegel
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Blogger
Slow growth is still growth
Rob Spiegel   7/5/2011 12:12:03 PM
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Yes, we've seen continual growth in the manufacturing sector. Not boom times, but growth. The Chicago and New York measures have also been expanding in the last couple years -- with the occasional dip. Again, slow growth, but growth nonetheless.

I remember a ton of complaining about the slow growth in the mid80s. At a certain point, growth accelerates.

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