NEWS DESK
US Manufacturing Improves, but Still Contracts in February
T
he US manufacturing economy contracted for a fi fth straight month in February while improving in key areas,
according to a monthly report by the Institute for Supply Management. The institute’s PMI, which measures economic activity in manufacturing, was 49.5% last month. The report by ISM (Tempe, AZ) is based on a survey of purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction.
The PMI has indicated contraction since September, when the PMI was 50% even. The February PMI was better than January’s 48.2%. The 12-month PMI average is 50.5%. The high for that period was 53.1% in May and June 2015. The low was December’s 48%. The institute’s survey included signs the manufacturing economy may improve. The group’s New Orders Index for February was 51.5%, matching the January level and indicat- ing growth. The institute said 12 of 18 industries reported increases in new orders. The Production Index was 52.8%, up sharply from January’s 50.2%. The institute’s Employment Index was 48.5%. That still in- dicated contraction, but was better than January’s 45.9%.
Economist: Manufacturing Should Pick Up in Second Half
T
he US manufacturing economy will revive in the year’s second half, helped by stabilizing energy prices and reviving demand in China, an economist told a crowd gathered at the MFG Meeting in Palm Desert, CA, in early March.
“We’re about out of the woods,” Alan Beaulieu, president of ITR Economics, said during a presentation at the event, which is produced by the Association for Manufacturing Technology (AMT) and the National Tooling and Machining Association (NTMA). SME is also a sponsor. “We are not looking at a recession in manufacturing in the United States,” Beaulieu said.
Referring to the audience of manufacturing company owners and executives, he said: “Life is going to be good for you.”
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AdvancedManufacturing.org | April 2016
In 2015, falling oil prices, a strong dollar and weakening demand for products in China all contributed to a slowdown for US manufacturing.
Energy prices hurt demand for products used in oil and gas exploration. The high dollar made products more expen- sive in international markets. Declining Chinese demand hurt manufacturers, such as Caterpillar Inc. (Peoria, IL), who look to China as a major source of sales. With oil, “We’re going to see production decline, we’re going to see production capped,” Beaulieu said. “It’s going to improve around June.” He forecast that oil prices will reach $41 a barrel by the end of 2015 and go to $45 a barrel next year. Oil prices currently are around $35 a barrel. The economist also forecast an improving economy in China. “I see China stirring,” Beaulieu said. “There’s enough light at the end of the tunnel for me to be encouraged.” He said there “are signs of demand somewhere” in China for machine tools. Beaulieu also predicted the dollar will weaken against the
euro and yen as economies in Europe and Japan improve late this year and into 2017. The economist said manufactur- ers should plan for higher interest rates by borrowing in early 2016. He also said companies need to plan for higher wages and energy costs. The economist’s presentation, however, wasn’t all upbeat. Beaulieu is forecasting a relatively mild recession in 2019 and another “Great Recession” in 2030, brought on by govern- ments unable to cope with their debt levels. “In 2030, the federal government is broke,” he said. “I think Japan is fi rst domino to fall. It’s a global event, driven by global debt.”
Women in Manufacturing Honored T
he Manufacturing Institute announced it will award 130 women with the Women in Manufacturing STEP (Science,
Technology, Engineering and Production) Ahead Award. The STEP Ahead Awards honor women who have demonstrated ex- cellence and leadership in their careers and represent all levels of the manufacturing industry, from the factory-fl oor to the C suite. “These 130 women are the faces of exciting careers in manufacturing,” said Jennifer McNelly, executive director, The Manufacturing Institute. “We chose to honor these women because they each made signifi cant achievements in manu- facturing through positive impact on their company and the industry as a whole.” The STEP Ahead Awards are part of the larger STEP Ahead initiative, launched to examine and promote the role
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