PMPA/ITR Economics Forecast Report May 2022  

 

The latest ITR report presents economic evidence to argue that despite the new uncertainties as a result of the Ukraine War and slowing capital spending, we are in a better position than the media would have us believe.

Higher energy costs – drawing attention in headlines – are still a smaller share of consumer budget than back in 2011. There is no denying supply chain disruptions and higher commodity prices, and the impacts of these will be uneven across the economy.  However, the fundamentals continue to show no more than a flattening at the bottom of the business cycle in the first half of 2023.

Consumers are well positioned going into this cyclical decline with stronger cash resources and lower debt to income than in the past. Savvy managers will focus on leadership, increasing efficiency and productivity by investing to gain competitive advantage – and free up existing talent to perform on higher value jobs and responsibilities. Stay calm and deliver first pass quality on time to your most profitable customers.

 

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The Institute for Trend Research (ITR) quarterly reports focus on major areas of economic growth and decline in key market segments for the Precision Machined Products Industry. They are provided to PMPA members as part of the association’s overall business intelligence program and are used as a management tool to help PMPA members plan for what lies ahead and which markets they should focus on in a complex manufacturing environment. 

PMPA Business Trends March 2022

 

The PMPA Business Trends Index increased dramatically by 29 points or 19 percent to 181 from February’s 152- which was, itself, our index’s second highest level ever. The increase in sales was NOT a result of increased hours of work- indicating that inflation of costs could be a likely factor. Our Sales Index performance in March dramatically heralds a pivot and perhaps a top in our manufacturing activity going forward. Inflation, not Units produced, seems a likely explanation for the parabolic increase in our Sales Index in March. Stay alert to anticipating and overcoming supply and sourcing challenges. Note- Due to the dramatic outperformance of the Index to history- over 3 standard deviations above 4 year average- we  took extra steps to validate the submitted data. Over 69 percent of respondents reported double or triple- digit sales increases in March 2022.

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

 

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Released April 25, 2022.   

Miles Free and Carli Kistler-Miller discuss the real value of titles in your shop and the many ways it can impact morale amongst our performers.