PMPA Business Trends November 2022

PMPA’s November Business Trends Sales Index declined seasonally but remained above the value for same month prior year, and its five-year average for the month, logging an all-time high for November at 147.  Half of our sentiment indicators improved, while half came in level, very positive given the seasonality we expect this time of year.

For the year, our index is up 21 points over 2021 calendar year average, an increase of 15 percent. Our year-to-date average of 162 is three points or one and a half percent higher than our April prediction. 

As you enjoy the seasonal holidays with your family and loved ones,  do keep in mind your business’s high level of sales and performance this year. These are a blessing in every tradition.

 
If you are not currently participating in PMPA’s Monthly Business Trends reporting, you are missing an excellent peer benchmark and a tool to provide you with confidence for your business decisions. Contact Veronica Durden to sign up.

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PMPA Speaking of Precision Podcast:

Speaking of Precision: Season 3 Finale (Blooper Reel)

PMPA’s Miles Free & Carli Kistler-Miller had another wonderful year recording the third season of Speaking of Precision throughout 2022. Maybe too much? Happy Holidays and Happy New Year!  Season 4 starts January 2nd!

Published December 26, 2022

 

PMPA 2023 Holiday Time Off Report

 

The 2023 Holiday Time-Off surveys have been compiled and calculated, and the 2023 Holiday Time-Off Reports are attached. Our thanks to the 75 member companies who completed and returned a survey.  Please remember that the results of the survey indicate which 2023 holidays those companies plan to offer their employees off with pay.  It does not indicate which, if any, holidays they may offer off, without pay.

The 2023 Holiday Time-Off Reports will be available for reference throughout the year on the Reports page of the PMPA website.

 

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PMPA Speaking of Precision Podcast:
Behind the Scenes: Mastery Program 2023-2024

Miles Free and Carli Kistler-Miller give our listeners a sneak peek into planning the upcoming Mastery Program, including stops and what our attendees will experience on these tours. Keep a lookout – Registration opens in January 2023!

Published December 5, 2022

 

Manufacturing in the US Economy — and Our Place in It? 

Manufacturing is essential to our economy and Precision Machining is just as essential to manufacturing.

by Miles Free III

Director of Industry Affairs, PMPA

Published December 1, 2022

Manufacturing is the fourth largest segment of the U.S. economy. Counted by itself, manufacturing in the U.S. would be the eighth largest economy in the world. Manufacturing created 11% of value added to the U.S. GDP in 2021. In 2020, U.S. manufacturing output was $2,345 billion. Manufacturing directly accounts for 8.6% of the U.S. workforce (about 12.2 million people), 60% of U.S. exports, 55% of patents and 70% of research and development (R&D) spending, according
to the National Association of Manufacturers (NAM) and a McKinsey & Company analysis of U.S. Bureau of Economic Analysis (BEA)and U.S. Bureau of Labor Statistics.

However, manufacturing relies on inputs from other sectors in the U.S. and global economies: energy from fuels and utilities; materials from mines and mills; machines, tools and equipment for production; packaging and freight services for our raw materials and final products; accounting; and other services. All of these are important inputs to manufacturing success. Purchases of these inputs by manufacturers lead to an enhanced final demand in the broad economy. This is called the economic multiplier and the U.S. B.E.A. calculates that one dollar’s worth of final demand in manufacturing results in an additional $2.68 of total impact to the overall economy. Manufacturing investment leads growth.

In the U.S. Midwest, we tend to think that manufacturing is just another word for metalworking. In fact, chemicals, computer and electronic products, and food, beverage and tobacco products are the top three manufacturing sectors
by dollar output. Aerospace and other transportation equipment, motor vehicles and parts, and machinery are segments that we serve — and these all have greater sales than our sector.

Fabricated metals, classified as NAICS 332000, is the name of the industry in which our precision machining/
contract manufacturing shops are classified. It is the seventh largest sector in manufacturing — in 2019, fabricated metals products output was $161.2 billion.

Precision machined products (our industry segment) is classified as NAICS 332721. In 2018, which is the latest data available from the U.S. Census, our industry sales were $20.8 billion, or almost one-eighth of the output of the fabricated metals industry. Our top 10 largest markets served, according to 2018 U.S. Census data, are shown above.

Manufacturing is important. It is the fourth largest segment of the U.S. economy. Arguably, nothing in our economy would function without the critical technologies that our precision machined components enable — machinery, mobility, aerospace and medical. I am fond of quoting Lothar Horn, CEO at PMPA technical member company Horn USA, who stated, “No car runs, no aircraft flies and no hip replacement is fitted by a doctor without precision tools having previously been in use.”

Precision tools are skillfully employed by precision machinists at precision machining contract manufacturing shops like yours. What you make matters. Your decisions on part quality and acceptance make a difference. A difference that matters. We make parts for “can’t fail” applications. Applications where critical human safety is the expected outcome — and one that we take for granted every day. Our production may be just one-eighth of the seventh largest manufacturing industry, which is itself the fourth largest sector of the U.S. economy. But, every day, people live well because we are the hands of the physician, the enablers of mobility and transportation, and the suppliers of essential and critical infrastructure to keep our economy thriving. Economics may be a dismal science, but this peek into the economy of manufacturing makes me proud of our performers, their talent and their accomplishments. Precision machinists — we make the things that make a difference. About $20 billion worth each year!

Links
• NAM
bit.ly/PMPA-PM1222a
bit.ly/PMPA-PM1222b
• McKinsey & Company
mck.co/3DeVk1X
• Statistica
bit.ly/PMPA-PM1222c
• U.S. Census
bit.ly/PMPA-PM1222d

 

 

Author

Miles Free III is the PMPA Director of Industry Affairs with over 50 years of experience in the areas of manufacturing, quality and steelmaking. Miles’ podcast is at pmpa.org/podcast. Email Miles

Choosing Work Perks

Workforce is tight and there are a lot of ideas to retain your skilled workers. How do you choose?

by Carli Kistler-Miller

Director of Programs & Marketing, PMPA

Published December 1, 2022

The manufacturing workforce is a challenge. That is not news. That fact is decades old and, with our current economic environment and unemployment at a record low, it is probably not likely to change anytime soon. If you search online, you will find article upon article with ideas of how to retain a skilled workforce (yes, I write articles on it, too) and all the perks which can be offered. But with all those ideas, how do you choose the ideas that are best for you?

 

A Slew of Ideas

Here is a list of ideas (in no particular order) I have accumulated through discussions with PMPA members and articles I have read:

• Free snacks/free coffee
• Flexible schedules
• PTO awarded for good attendance
• Mini golf course on the roof
• Monthly fun days (lunches with activities)
• Bonuses
• Salary incentives
• Employee of the Month with parking spot
• Indoor golf simulator
• Decked out breakroom with video games
• Sponsor fantasy football league

 

How to Choose?
It is obvious you can’t do everything on that list (if you build the mini golf course, please send me an invite.) And just because you can do something doesn’t mean you should do something. Find a good fit. You know your employees. If you don’t know them well enough, then talk to them. What motivates them? What would they consider a perk? Remember, the people you currently employ are also the type of people you are looking to recruit and incentives play a large part in recruitment.

You don’t have to go big — I’m always amazed at what people will do for a free T-shirt or food — but find a great fit. Do you have people with school-age children? They may appreciate the flexible schedule over a breakroom with video games. Many of the incentives also promote team building (fun days and fantasy football league.) In addition to considering what would motivate your employees, you need to take into account the budget, available space and schedule. You need to find a balance and be flexible. It’s the old chicken and the egg dilemma. The company exists to make parts. You can’t make parts without employees. Studies show that happy workers are good workers (Oxford University’s Saïd Business School, 2019), so finding that balance is worth it. In short, determine your objective,  nd a perk or perks that  t into your culture, budget, schedule and space, then make it happen. The perk for the company? Happy, productive workers who stay.

 

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Author

Carli Kistler-Miller, MBA has over 25 years of experience with
communications, event/meeting planning, marketing, writing and
operations. Email: gro.apmp@rellimc — Website: pmpa.org.