Our July 2010 Business Trends Report provides hard data that the precision machining industry is maintaining “A New Normal.”
The three month outlook for sales, lead time, employment and profitability are all quite positive as our industry passes the fourteenth month above the May 2009 low.
We are encouraged that our index did not drop further in July, a seasonally weak month for our industry.
Average length of first shift is up to 43.1 hours, more than 5 hours above the 2009 average.
94 percent of participating shops expect profitablity to remain the same or improve.
Those expecting sales to remain the same or increase made up 90% of our respondents.
The last shop owner I spoke with said that he was “Busier than heck and can’t ship parts fast enough.”
We suspect that part of his problem is getting the raw materials and tooling that he might need when he needs it…
How about you? Are you busier than heck? Are you still in the range we are calling the New Normal?
Tag: The New Normal
The recovery of the precision machined products industry is obvious in our latest PMPA Business Trends Report.
We have been calling our new level of sales “The New Normal.” While we have lost a decade in terms of sales volume, we are at sustainable levels of sales because of the lessons and adjustments that we made over the decade. The 16+ point gap between the 3 month moving average (97.3) and 12 month moving average (81) for sales makes a case for cautious optimism.
(OK, perhaps I am understating this a bit!)
Sales Index: down just 5 points to 100 from March 2010 value of 105.
Average Length of First Shift: 42.5 hours for April, compared to 38.1 for CY 2009. only 3 % of respondents report less than 40 hours.
Sentiment for the next three months:
Sales: 88% of respondents say Same or better.
Lead Times: 93% of respondents say same or longer. Shops are getting busy.
Employment: 99% of those reporting expect employment in their shop to remain the same or increase.
Profitability: 88% expect profitability to remain the same or improve over the next three months.
You can read the full report here: PMPA APRIL DATA.