The PMPA Business Trends Report Sales index for November plummeted 23 points from 132 to 109, a drop of almost 17%. Here are 5 reasons why we are unconcerned by what most would call a panic-worthy drop.
- The November value of 109 actually “just happens to be” the arithmetic average of the index for the last 4 Novembers.
- The drop is more about the record high in October than it is about a low November.
- Sentiment for Lead Time remains level for the next three months- our shops know their capacity and see it remaining the same.
- Sentiment for future Profitability, Employment, and Sales all increased in November despite the drop in actual sales.
- November and December are typically weak sales months for our industry. January sales will likely be “gangbusters” as our customers return to work after end of year tax inventory and holiday shutdowns.
By the way, the average length of first shift hours scheduled was 43.5 hours, just a half an hour short of 44 hours- which means average shop in our industry was just short of working 10% overtime as a regular schedule- despite that “huge drop” in sales.
The outlook for precision machining is looking strong according to the 87 respondents in our survey and report.
PMPA Business Trends Report for November 2014