PMPA Business Trends September 2020

 

Our Shops Are Proving to be “Essential Manufacturing” to the Economic Recovery!

September Precision Machining Industry Sales Rate of Growth Accelerates 8.4% over August as

Federal Reserve’s Industrial Production Index Fell 0.6%, Manufacturing Output fell 0.3%

All sentiment indicators increased or remained level for the fifth consecutive month.

 

 

PMPA BUSINESS TRENDS SEPTEMBER 2020

2020 Annual Meeting Speaker Videos Now Available

 

We realize that many of our PMPA members were unable to travel and join us at the Big Cedar Lodge in Ridgedale, Missouri, October 22-25 for the 2020 Annual Meeting.  We also realize that this year’s Annual Meeting provided great speaker content on topics that were relevant (PPP loans) and timely (2020 Election update) and will offer you insights on how to pivot your company out of the pandemic.  

 

All of the speaker presentations were recorded, and we are offering you the opportunity to purchase the video viewing rights at a bundled price of $300.00. 

 

Once you purchase (or “register” for) the videos, you will receive an email with a unique URL link and password to a landing page containing all the presentation videos. The videos will be available on that page until December 15, 2020.

Questions? Contact Renee Merker (gro.apmp@rekremr) or Joe Jackson (gro.apmp@noskcajj) at PMPA 440-526-0300

CLICK HERE TO PURCHASE THE ANNUAL MEETING SPEAKER VIDEOS

PMPA’s Latest Membership Manufacturing Survey Results

Thanks to the 72 companies that responded to our latest request for updated information about your shops’ current status and expectations going forward.

We have forwarded these results to our team at The Franklin Partnership who will use this to help craft policy in Washington D.C.

Typically we share some inferences from our work, but this survey is clear and hardly needs any additional sensemaking.  However, the fact that 86% of shops have no skilled employees on furlough, (Question #4) and 36% of respondents are actively seeking skilled workers right now (Q #5) are convincing evidence of our positive future.  

Here are some other very interesting points to consider:

  • The dearth of applications for employment (Q #7) is reported by half of our shops – attributed to very generous unemployment payouts.
  • We found the fact that 2/3 of our shops reported no confirmed cases of COVID-19 (Q #9) to be interesting.
  • ~35% of shops reported some Reshoring activity, though at small dollar amounts (Q #11 & #12)
  • 88% of respondents reported PPP loans (Q #13) which permitted retention of employees according to 89% of respondents (Q #15)
  • PPP Loan Forgiveness remains a mystery and an important one to be solved for our member companies….
  • 86% of respondents would seek another forgivable PPP loan as described in (Q #18)

Again, thanks to those companies who took the time to respond and share with the rest of us their current status.

PMPA MANUFACTURING SURVEY RESULTS #5

 

 

PMPA Welcomes Two New Affinity Partners

 

PMPA is pleased to welcome two new Affinity Partners to benefit our member companies: 

APPI Energy provides members an opportunity to save on energy costs and have access to energy audits, LED lighting, solar panel installations and utility bill management.

SEE HOW APPI ENERGY CAN BENEFIT YOU

 

Paperless Parts offers members sales and quoting platforms for job shop manufacturers which provide key digital quoting capabilities and educational tools. Sign up for their October 15th introductory webinar and visit the PMPA website to learn more about the benefits they can offer.

 

SEE HOW PAPERLESS PARTS CAN BENEFIT YOU

 

SIGN UP FOR PAPERLESS PARTS WEBINAR

 

PMPA Business Trends August 2020

 

 

The PMPA Business Trends Sales index inched up to 119,  up 1.7% over July.  While this small increase might be seen as a negative, the greater picture is that this 119 value is a 42% increase in sales over the low point for the year ( April 2020-just four months ago) obviously positive. While the pace of improvement is slowing, we continue to outperform the Fed’s measures for IP and Manufacturing. We believe that this is because our customers still are maintaining very low inventories for components. Low levels of component inventory at our customers,  leads to urgent needs and orders for our parts as demand improves.. All sentiment indicators are strongly positive for the fourth consecutive month. Our outlook remains positive, as our industry sales outpace those of the Fed indicators as the economy continues to recover.

 

 

PMPA BUSINESS TRENDS AUGUST 2020

U.S. Reverses Course on Tariffs on Aluminum Imports from

Canada

 

PMPA is a founding member of the CAMMU Coalition. We are pleased to be able to pass along the following breaking news.

 

The U.S. announced today that it will not impose 10 percent tariffs on aluminum imports from Canada, stating that the U.S. would resume duty-free treatment of aluminum from Canada retroactive to September 1.

 

As you may recall, the U.S. announced in August that it would re-impose Section 232 tariffs on aluminum from Canada, claiming a surge in imports.  CAMMU opposed the tariffs, signing an industry letter and issues press statements (see here and here).

 

The announcement by U.S. Trade Representative Robert Lighthizer was made just before the Canadian Government was expected to announce retaliatory tariffs on U.S. products.

 

Amb. Lighthizer stated that the U.S. would set monthly quotas for imports of Canadian aluminum of 83,000 tons in September and November, and 70,000 tons in October and December, and stated that if shipments “exceed U.S. expectations, the United States will impose the 10 percent tariff retroactively on all shipments made in that month.”  However, a Canadian Government spokesperson said that it has not “agreed to anything” with respect to quotas and that the U.S. plan was “unilateral.”

PMPA Business Trends July 2020

 

With 79 companies responding, the PMPA Business Trends Index for July increased 39.3% to 117 compared to the year’s low in April of 84. It came in up 4.5% above June’s 112 value. This 117 value is down just 2.8 points or 1.4% from the 5-year average for July of 119.8. Our shops’ 4.5% increase in July compared to the Federal Reserve’s reported increase of 3.0%  in industrial production- and compared to the reported 3.4% increase for manufacturing output- shows that our precision machining shops continue to recover faster than the broader manufacturing industry.

 

 

 

DOWNLOAD PMPA BUSINESS TRENDS

ITR Economic Report – August 2020

Apparently our optimism is congruent with theirs.

As voiced in ITR Economics’ most current economic report…“The current downturn was caused by a natural disaster and not by economic fundamentals, which has important implications for the subsequent recovery trend…

Even more encouraging is that the US Personal Savings Rate spiked to record highs, signaling that consumers were able to set aside part of the stimulus money.

Taken together, the aforementioned evidence is cause for measured optimism…

Full recovery is expected to come faster this cycle relative to the Great Recession, which took about five years..”

Read the full August 2020 report below, as prepared especially for PMPA by ITR Economics.

 

The Institute for Trend Research (ITR) quarterly reports focus on major areas of economic growth and decline in key market segments for the Precision Machined Products Industry. They are provided to PMPA members as part of the association’s overall business intelligence program and are used as a management tool to help PMPA members plan for what lies ahead and which markets they should focus on in a complex manufacturing environment. 

 

 

 

DOWNLOAD ITR REPORT

PMPA ALUMINUM TARIFF PRESS RELEASE

Friday August 07, 2020

The White House announced reinstatement of tariffs on aluminum yesterday. The Tariffs would go into effect August 16, 2020.

Presidential proclamation: https://www.whitehouse.gov/presidential-actions/proclamation-adjusting-imports-aluminum-united-states-080620/

This goes against the actual data, which shows that aluminum imports are actually down: https://www.aluminum.org/news/latest-us-data-primary-aluminum-imports-canada-decline-june

Even the US Aluminum Association, arguably the ones most likely to gain from tariff protection, is opposed to the tariff: https://www.aluminum.org/news/reinstating-section-232-aluminum-tariffs-wrong-approach-us-industry

Canada has already pledged retaliation:
https://www.theguardian.com/world/2020/aug/07/canada-us-tariff-aluminum

 

 

PMPA PRESS RELEASE – 232 ALUMINUM REINSTATEMENT – 200807

 

PMPA BUSINESS TRENDS JUNE 2020

Wednesday July 29, 2020

PMPA Business Trends Sales  Index for June 2020 recovers to 112, up 33% over April 2020 Calendar year low!

“This month’s 112 value is 37 points or 49.33% higher than the 2009 Calendar year average of 75 during the Great Recession.  We’re doing alright!”

 All forward-looking sentiment indicators for Sales, Lead Times, Employment and Profitability were also positive for the second consecutive month

Our respondents’ data showed that we outperformed the FED’s IP and Manufacturing indicators by a large margin.

We are in a far better place this time around then we were during the Great Recession. (Our Shops’s Sales are currently 49% higher than the Great Recession low)

These difficult times may just be the beginning of the best thing that has happened in manufacturing, as foreign supply chains continue to prove unreliable, and our shops and essential workers step in to fill the need for critical components.

 

BUSINESS TRENDS JUNE 2020 REPORT