Released June 26, 2020.   

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SBA Releases Important New Rules Regarding PPP Loan Forgiveness

 

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The Small Business Administration (SBA) just released important new rules regarding forgiveness of Paycheck Protection Program (PPP) loans. The June 22 Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule offer additional clarification on the rules governing forgiveness of PPP loans, while providing borrowers with additional flexibility. What do employers need to know about these developments?

 

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PMPA Business Trends June 2020

 

“Precision Machining Industry Sales Recover to 112 up 33% Over April 2020 Low”

 

With 77 companies responding, the PMPA Business Trends Index for June increased by 33% to 112 from the year’s low in April of 84. It came in up 30.2% above May’s 86 value. This 112 value is down 19.6 points from the 5 year average for June of 131.6, a decline of 14.9%. For perspective, the lowest value for the BT index during the Great Recession was 64, in May of 2009. June’s 112 value is up 75% from that Low point in our history.

 

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“Manufacturing output rose 3.8 percent in May, but it was still 16.9 percent below its pre-pandemic level in February. The index for durable manufacturing increased 5.8 percent in May; the most sizable gain among its components was for motor vehicles and parts, where output rose substantially but also remained more than 60 percent below its February level.”
Most sophisticated manufactured goods rely on precision machined parts in order to reliably function. This is great news.
Total industrial production increased 1.4 percent in May, as many factories resumed at least partial operations following suspensions related to COVID-19. Even so, total industrial production in May was 15.4 percent below its pre-pandemic level in February. Manufacturing output—which fell sharply in March and April—rose 3.8 percent in May; most major industries posted increases, with the largest gain registered by motor vehicles and parts.”
In Real Estate, they say the most important thing is  “Location, Location, Location.”
In Economics, I’d like to tell you that it is  “Direction, Direction, Direction.”
And while 1.4%  increase in industrial production may not seem like a lot (Better than most CD’s are paying, come to think of it) the direction is, as they say
“…a turn for the better.”

Industrial Production up 1.4% in May 2020

Markets showing strength 
The major market groups posted broad-based gains in their production indexes in May, but each remained well below its pre-pandemic level.

  • consumer goods rose 3.9 percent, led by a significant rebound for automotive products.[1]
  • production of business equipment rose 5.8 percent and was boosted by a substantial increase in transit equipment as most factories producing motor vehicles and civilian aircraft reopened.
  • The indexes for defense and space equipment, construction supplies, and business supplies also recorded gains.
  • The output of materials decreased 0.8 percent, as the production of energy materials was held down by declines related to oil extraction.

Industry Groups
Manufacturing output rose 3.8 percent in May, but it was still 16.9 percent below its pre-pandemic level in February.

  • The index for durable manufacturing increased 5.8 percent in May; the most sizable gain among its components was for motor vehicles and parts, where output rose substantially but also remained more than 60 percent below its February level.
  • Durable goods industries that recorded production increases between 8 percent and 10 percent include nonmetallic mineral products, aerospace and miscellaneous transportation equipment, and furniture and related products.
  • The index for nondurables rose 2.1 percent, with advances of around 10 percent or more for textile and product mills, for apparel and leather, for printing and support, and for plastics and rubber products. The output of other manufacturing (publishing and logging) moved up 2.5 percent.

Now the levels are not back to prior Pandemic readings. But we have certainly flattened the curve Virus wise!

Chart from Washington Post reported in AIER

“Direction, Direction, Direction.”  This is why we remain positive.
FED Reserve IP May 2020
What spike? AIER