Reports

REPORT ON BUSINESS TRENDS - September 2009

Monday, October 19, 2009
Bulletin Number: BT-0909

PMPA’s Index of Sales of Precision Machined Products rose to 82, just one point lower than January 2009’s high of 83; the second highest value for the year. The 8 point gain over August is not ‘seasonal’ as September sales are typically even with or show a modest rise compared to August in recent years. This is an 11 percent rise in the Sales index compared to August, and shows the 95 reporting companies in aggregate are showing a 26 percent recovery in sales compared to the 2009 year low of 65 in May, 2009. 74 percent of respondents reported net sales increases in September. Ninety-five (95) companies participated in this month’s report.

Reason for optimism: September marks the fourth month in a row of increasing sales in the precision machining industry. The three month moving average is now poised to cross the 12 month moving average. For our industry, a strong case can be made that sales are recovering. Fifty-two percent (52%) of participating shops reported double digit sales increases in September.

Sales Outlook: The percentage of respondents who felt that sales would decline over the next three months rose slightly to 19 percent from 14 in August. Thirty-five percent (35%) expect sales to increase, 45 percent believe sales will remain level for the next three months. The outlook for sales in the short term has stabilized.

Lead Times, Employment and Profitability: Ninety-one percent (91%) expect lead times to remain the same or lower; this is reflective of available capacity in our shops, not availability of material to make our products. Eighty-nine percent (89%) expect employment to remain the same or decrease, and 76% expect profitability to remain the same or further erode.

  • The “Average Length of First Shift (Hours)” is essentially unchanged compared to August at 38.2 hours. Eighty–eight percent (88%) of respondents were at 40 hours or less. The number of shops reporting hours in excess of 40 for their first shift rose to 11% from last months’ 9%.
  • Opinions for the next three months compared to today:
    • Net Sales: Those expecting sales to remain level or increase are a strong majority at 80% of respondents.
    • Lead Times: Ninety-one percent (91%) expect lead times to remain the same or decrease.
    • Employment: Seventy-eight percent (78%) of this month’s respondents are expecting employment to remain the same; the remaining 22% are evenly split as to increase or decrease.
    • Profitability: Eighty-three percent (83%) of respondents expect profitability to remain the same or improve over the next three months.
Current Environment: This report makes a strong case that precision machining industry sales are recovering. The percentage of respondents showing positive sales growth, and the large number showing double digit sales increases, and the rise of the index by 11 percent are strong and positive indicators of sales recovery.

NOTE: Ninety-five (95) participants this month.

Starting with this report we are including separate graphs of the PMPA Index of Sales and the Average Weekly Hours (length of first shift) indicators.

Contact Name: Miles Free
Contact Email: mfree@pmpa.org
Contact Phone: (440) 526-0300

Related Files:
Net Sales Index and Graphs