Month: March 2011

CNBC (3/28, Gewirtz) reported, “In another sign the American economy is on the comeback trail, a new survey from KPMG shows optimism is improving among US manufacturing and service industry executives.” The survey found that “68 percent of manufacturing executives believe business activity will be higher in the next 12 months,” a gain of 11 percent from October of last year. And “41 percent of those same executives say they plan to hire more in the weeks and months ahead,” up from 28 percent in the same time period.

The Ecommerce Journal (3/29) reports, “In terms of revenue 65% of manufacturers surveyed by KPMG expect revenues to rise in the next year. ‘American manufacturing is on the rise because companies are rebalancing, and it is pretty clear demand is picking up nationwide,’ said Lynne Doughtie, KPMG’s National Managing Partner for Advisory Services.”

Manufacturing Economic Activity At Highest Level Since 2004. The Boston Business Journal (3/28) reported in its “BBJ Morning Buzz” blog, “The manufacturing sector singularly contracted over the past several decades,” a contraction that was hastened by the recession. But now “a number of area manufacturing firms are sporting some new faces on their floors as the sector undergoes something of a recovery.” According to a recent article in the Sun Chronicle, “The Manufacturing Institute for Supply Management reported that nationally, economic activity in the manufacturing sector grew in February for the 19th consecutive month and reached its highest level since May 2004.”

From SME Daily Executive Briefing 3/29/2011

In an opinion article on the New York Times (3/28) website, Allison Arieff writes that in contrast to the image of decline people often associate with manufacturing in the US, “there are many parts of this country where manufacturing is very much alive, albeit in a different form.” Arieff focuses on the work being done by San Francisco’s SFMade and New York’s Made in NYC, “geographic ingredient branding” groups which “are increasingly able to share success stories of how manufacturing has developed new models for doing business in the 21st century.” Part of these companies’ success stems from a growing consumer desire to get locally produced goods, as have “growing consumer demand for greener, more ethically produced products, along with skyrocketing unemployment and nervousness about globalization.” Arieff argues that it is “time to rethink, and indeed rebrand, American manufacturing.”

From SME Daily Executive Briefing 3/28/2011

Best Month for Manufacturing Job Expansion Since 1973

Despite the slow overall recovery, the factory jobs picture in February was as strong as it’s been in any month since 1973.

It’s possible that January’s massive storms led to more hiring in February due to pent-up demand. But company managers say, and data show, that hiring is on the rise in the manufacturing sector.

Nationally, the Manufacturing Institute for Supply Management (ISM) report said 56 percent of factories were keeping employment level, and 35 percent added people to their staffs in February. Those kinds of readings have not been seen in 38 years.

U.S. Manufacturing Boom Stems Risk of Post-Quake Stock Panic

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

“U.S. manufacturing is booming” and helps explain why stock investors shouldn’t panic over Japan’s nuclear disaster or the Middle East’s conflicts, according to Edward Yardeni, president and chief investment strategist at Yardeni Research Inc.

Growth has been “surprisingly robust” and may be accelerating, Yardeni wrote today in a report. He cited the Federal Reserve Bank of Philadelphia’s factory index for March, which showed the fastest expansion since 1984. The indicator for eastern Pennsylvania, southern New Jersey and Delaware climbed to 43.4 from 35.9 in February.

In February, the ISM index rose to 61.4, matching its highest level since 1983. Readings greater than 50 point to expansion. The indicator has risen for seven straight months.

“It is becoming increasingly obvious” that U.S. factories are taking part in a global manufacturing surge that includes countries such as Germany and South Korea, Yardeni wrote.

The growth is among a dozen reasons not to panic over what’s happening in Japan and the Mideast, the report said. Others include “super-normal” earnings growth, a rebound in employment, a pickup in takeovers and “extremely stimulative” fiscal and monetary policy.

Manufacturing Output Rose In February.

The New York Times /AP (3/18, B3) reports that US manufacturing output rose in February for the sixth straight month in a row, gaining 0.4 percent, according to the Federal Reserve. “Manufacturers have increased production in 17 of the 21 months since the recession ended,” and “stronger factory activity has been an important factor supporting job growth” During February, “factories added 33,000 job.”

Bloomberg News (3/18, Willis) reports that February’s growth “followed a 0.9 percent January gain that was three times as large as initially estimated, Fed figures showed today.” Firms are “benefiting from overseas demand, business investment and inventory restocking that are fueling manufacturing.”

Industry Week (3/18) reports, “The production of durable goods advanced 0.9% in February, and gains were widespread across its major categories.” Motor vehicle production rose 4.2%, and “sizable gains also were recorded in February in wood products; nonmetallic mineral products; computer and electronic products; electrical equipment, appliances, and components; furniture and related products; and miscellaneous manufacturing.”

The “Real Time Economics” blog of the Wall Street Journal (3/17, Lahard) reports that while factories in general are seeing a low level of capacity utilization, textile mills, apparel makers, and producers of computer and peripheral equipment have seen a significant tightening of capacity, although for the first two it’s mostly due to a drop in US productive capacity.

Fed: Philadelphia Area Manufacturing Up.

According to the Philadelphia Inquirer (3/18, Schweizer), the Federal Reserve Bank of Philadelphia reported that, “riding a wave of new orders, manufacturers in the Philadelphia area ramped up production this month to the highest level in more than 27 years,” rising to 43.4 from 35.9 last month. “The strength was broad-based, the Philadelphia Fed said, with manufacturers’ shipments of finished products, unfilled orders, and labor conditions all at high levels.”

Bloomberg News (3/18, Willis) reports, “Rising exports to emerging economies such as China, along business investment and inventory rebuilding are generating bigger gains in factory production.” Industry Week (3/18) reports, “Increases in input prices continue to be widespread, and more firms have been reporting increases in prices for their manufactured goods in recent months. Most firms also indicated that they expect acceleration in production over the next quarter.”

According to the Philadelphia Business Journal (3/18, Kostelni), the indicators “pointed to an uptick in future production activity during the next quarter.”

As Copper Prices Rise, Manufacturers Switch To Aluminum.

The Wall Street Journal (3/18, Whittaker) reports that increasing copper prices have manufacturers turning to aluminum, as the difference in cost of the metals has reached the point that it is greater than the expense of retooling some manufacturing processes as well as the cost of the extra aluminum needed to conduct the same amount of electricity in copper. Wiring for cars and buildings, as well as evaporator and condensing coils for air conditioners and refrigeration are poised to make the switch.

From SME Daily Executive Briefing 3/18/2011