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CREATE A BETTER MANUFACTURING ENVIRONMENT THROUGH TWO-WAY RADIO TECHNOLOGY
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ENGINEERING FROM HOME TO ASSIST IN THE COVID-19 PANDEMIC PAGE 14
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MANUFACTURING OUTLOOK PAGE 22
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MARCH ISM PMI: 49.1%
Released April 1st -The Full Executive Summary Report On Business - Page 24
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Manufacturing Outlook / April 2020
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TABLE OF CONTENTS Publisher LEWIS A WEISS Editor in Chief TIM GRADY Creative Director CRAIG ROVERE Contributing Writers ROYCE LOWE TIM GRADY NORBERT ORE ANDREA OLSON CHRIS KUEHL CARSTEN FUNKE NIC TEMPLE THOMAS R. CUTLER Production Manager LINDA HOPLER
5 PUBLISHER’S STATEMENT A word from our publisher
LETTERS TO THE EDITOR:
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Editorial Office JACKET MEDIA CO. 75 LANE ROAD FAIRFIELD, NJ 07004 (973) 808-8300
Text “RADIO” to 66866 for comments, suggestions and ideas and guest requests for MFGTALKRADIO.COM podcast. © 2020 Jacket Media Co. No part of this publication may be reproduced or used in any form without the prior written permission of the publisher. Manufacturing Outlook is a registered trademark of Jacket Media Co.
YOU HAVE BEEN CHEATED YET AGAIN STIMULUS IS A FRAUD!
by Kerry Lutz, Financial Survival Network
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A BRIDGE TOO FAR... UNLESS WE DRIVE
by John Kennedy, PhD., CEO of NJMEP
MANUFACTURING TIDBITS
Insights from inside manufacturing in action
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LINEN AND UNIFORM SERVICES RECOGNIZED AS ESSENTIAL SERVICES IN BATTLE WITH COVID-19 PANDEMIC by Thomas R. Cutler
14 ENGINEERING FROM HOME
TO ASSIST IN THE COVID-19 PANDEMIC by Thomas R. Cutler
15 A PANDEMIC SHOWS HOW
ORGANIZATIONS CAN CHANGE FASTER THAN THEY THINK
Current Circulation 45,200 Advertising ADVERTISE@MFGTALKRADIO.COM
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by Andrea Olson
16 JACKET MEDIA CO’S INDUSTRYLEADING MANUFACTURING PODCAST RANKED #5 BY FEEDSPOT.COM by Tim Grady
18 CREATE A BETTER
30 NORTH AMERICAN OUTLOOK Manufacturing in the US, Canada & Mexico
32 METALS OUTLOOK The cost, making and treating of metals
34 AEROSPACE OUTLOOK The aerospace industry
36 AUTOMOTIVE OUTLOOK Auto industry news
38 ISSUES OUTLOOK Issues around the globe
40 ENERGY OUTLOOK Energy and the environment
42 GLOBAL PMI OUTLOOK
MANUFACTURING ENVIRONMENT THROUGH TWO-WAY RADIO TECHNOLOGY
by Norbert Ore
COVID-19 PANDEMIC: FORCE MAJEURE IMPLICATIONS ON THE SUPPLY CHAIN FOR BUYERS AND SELLERS
A look at Europe
by Ben Burns
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THE CREDIT MANAGER’S OUTLOOK by Dr. Chris Kuehl
by Thomas R. Cutler
22 MANUFACTURING OUTLOOK A look at manufacturing around the globe
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44 EUROZONE OUTLOOK
45 ASIA OUTLOOK China, Japan and India
46 SOUTH AMERICA OUTLOOK Brazil in the spotlight
ISM MANUFACTURING REPORT ON BUSINESS
Open call for...
Contributing Writers for new and existing content. Let’s start a conversation – Contact us at info@jacketmedia.com or visit mfgtalkradio.com/writer for more information.
PUBLISHERS STATEMENT PUBLISHER’S STATEMENT Please – don’t panic. We realize that the coronavirus is scary, and the country, in fact much of the world, has been asked to do some unusual things, like stay home from work, shelter in place, and keep your distance with others. It is unprecedented that a $20 trillion economy traveling at 90 miles an hour suddenly brakes to 9 miles an hour. It’s like we’re all on this huge bus, thrown against the seat in front of us, and we’re all wondering what the heck is going on? Then we look out the window and we’re surrounded by a thick fog. Where are we? What are we supposed to do? Non-essential businesses are closing. Those who can, are asked to work from home. Employees face layoffs or furloughs or reductions in force. It is absolutely bizarre. But – it is not forever. While we grieve for those we have lost, and are concerned for those we may lose, billions of people will survive this. It is a horrible global event, but this too, shall pass. We encourage you to tune in to our podcast, Manufacturing Talk Radio, and listen to some of the April shows that discuss the local and global situation all of us find ourselves in. We have to steel ourselves in this calamity, and it will test our mettle. But people are resilient. When this passes, we will begin to bring back that which was shut off or closed down. We will accelerate that which was slowed to a crawl. Manufacturing and nonmanufacturing will survive, and as 2020 rolls into 2021, it will once again thrive. Imagine the lessons learned from this unbelievably unique experience in your life. Imagine the changes that will take place in how business is accomplished, where companies source raw materials or products, how work is done from office cubicles to factory floors to the great outdoors. You are in the midst of an unexpected paradigm shift in both manufacturing and non-manufacturing. Everything we know and have been doing in our work lives, and much in our personal lives, will be looked at through a new prism being forged in the fires of this cataclysm. On the other side of these dark days, the country will need innovative thinkers and self-starters who can take an economy which has ground to a near halt and get it back in motion. We will be rebuilding, in many new ways, a $20 trillion engine. We’ve done this before, usually after terrible wars. Inspired inventions of new processes, factory systems, communication networks, brilliant products, purchasing methods, distribution approaches will come out of the restart and rebuild of the world economy. Let history be a guide. World wars killed hundreds of thousands of people, wrecked economies, and destroyed production capabilities. In the 1950’s, Japan began recovering from war devastation. They build new factories with new methods of production. By the 1970’s on through today, Japan became a world industry leader in quality, and many of the systems used in American manufacturing today were inspired by and even adopted from that rebirth of insightful thinking and reformation. In 1950, few outside of Japan would know the definition of kaizen. Today, it is a cornerstone of “change for better” also known as continuous improvement in the International Standards Organization ISO quality system. Ben Franklin, one of the Founding Father’s of America, the Bill of Rights, and the U.S. Constitution, is credited with saying, “Out of adversity comes opportunity.” Begin now looking for opportunities to change things for the better. Focus on “after I survive this, I will...” Realize you are an incredible person with a creative mind who can make a difference in the very near future as this pandemic hurricane batters the world, beats up your business or your employer, your finances, and what you were used to. A new normal is coming that you can change for the better every new day that dawns. Handle today, and embrace tomorrow – you will be sorely tested and greatly needed. Lewis A. Weiss Publisher
Lewis A Weiss, Publisher
Contact laweiss@mfgtalkradio.com or text “RADIO” to 66866 for comments, suggestions and ideas and guest requests for MFGTALKRADIO.COM podcast. Manufacturing Outlook / April 2020
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COVER STORY LETTERS TO THE EDITOR
YOU HAVE BEEN CHEATED
YET AGAIN
STIMULUS IS A
FRAUD! by Kerry Lutz Financial Survival Network
DEAR EDITOR:
I’m sorry to report that we’ve been scammed again! Bad news, the PPP (Payroll Protection Program) has been fraudulently misused by the big banks and turned into a partial indirect bank bailout. It came to my attention that at least two major banks gave loans only to customers who were already borrowers. I have yet to encounter any one in my Facebook Group or my network who actually received PPP funds. In other words, the banks have screwed us yet again. As envisioned by the Congress, there was to be no favoritism and all applications were to be treated equally, on a first come – first serve basis. With the exception of some small community banks and credit unions, this never happened. Rather the banks took care of their larger small business customers to ensure that their loans would be paid
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back. They acted purely in their own self-interest, as they always do. One large bank never even bothered to open a public portal, (they claimed to be hard at work on it) instead setting up a secret back office for their favored customers, (we have the emails). I spoke with another Too Big to Fail bank and was asked if I was a borrower. When I said no, I was then directed to the public portal, which took over a week to open. And today, I was informed that they were fresh out of money. Now Goldman Sachs Treasury Secretary Mnuchin wants to give his big bank buddies another $250 billion so they can rinse, repeat and scam us yet again!
LETTERS TO THE EDITOR
And forget about getting an SBA EIDL advance. Very few have been made and for far less than the $10,000 that was originally promised. Or maybe you’ve considered applying for unemployment insurance. As of now, for Americans most in need, it’s unobtainable. Many state’s systems have seized up under the sheer volume of applications. Who knows when or if they will ever come online. (Florida, New Jersey, Missouri, Kansas, Nevada and probably many others). It is up to each of us to take care of ourselves and others. We should think seriously about reopening our businesses as soon as possible, regardless what the state may say. Their plan for so-called vital businesses and employees to come back first is specifically aimed at maximizing your pain. Your business and your employees are vital to you, the country and the economy. Force this point home to the corruptacrats who have so damaged our country and our lives! As a recovering attorney, it is my opinion that most, if not all the draconian measures taken by the Federal Government and the states during the
pandemic are unconstitutional and illegal. The epidemic has for all intents and purposes passed. New cases are rapidly declining, regardless what the politicians may claim. It’s clear that the damage inflicted upon the US and Global Economies has been far worse than the damage caused by the Coronavirus. Please pass this on to anyone and everyone you know. While we may not have much power alone, once the scope and nature of this fraud is exposed. Hopefully, the outrage will be too much for our so-called political leaders. Maybe it will strike fear into their hearts and force them to fully fund the program and exclude the big banks. Or perhaps they could do away with the banks as gatekeepers and send the funds directly. This is an outrage to every American and American small business owner. It cannot be allowed to stand. It’s time to fight back and do it now! Good luck, Kerry Lutz Financial Survival Network - financialsurvivalnetwork.com
Manufacturing Outlook / April 2020
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COVER STORY LETTERS TO THE EDITOR
A BRIDGE TOO FAR... UNLESS WE DRIVE
by JOHN W. KENNEDY, PH.D. CEO OF NJMEP
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Manufacturing Outlook / April 2020
DEAR EDITOR:
LETTERS TO THE EDITOR
I’ve been in manufacturing and engineering for many years, and have watched as our efforts were always downplayed. In fact, I took that reality and wore it as a ‘Badge of Honor’ like so many others....and where did that get me...us? It allowed our critical Industry Sectors to be forgotten and disrespected.
Very few companies make ‘complete machines’ anymore without the support of a very capable and complex supply chain. That includes automotive, airline, and military products. Remove the meat from the hamburger and you’re left with a cheese sandwich.
The fact is, that over my own career, I’ve seen many ‘crossroads’: 9-11, natural disasters, price and tariff wars, and now a pandemic - the initial ‘talk’ is always the same, “Bring U.S. Manufacturing back to the U.S.!”
We don’t create the various types of steel and aluminum that we once did. We allowed it to go off-shore and now we can’t always get what we need. Yes, there are multiple types of steel that have different properties and different uses, but not at our fingertips.
Then the urgency recedes, and we go back to business as usual. How’s that working now? Does anyone foresee much changing at all moving forward?!? Oh sure...we’ll convene task forces made up of a variety of governmental and academic experts with a few major corporations thrown in to provide a better visual...then what? (Cue the tumbleweed...) Let’s look at the facts and then we can make more intuitive and effective decisions: Manufacturing never completely left the U.S. or New Jersey: we still make many high-end products, and we lead the world in innovation, productivity and quality. New Jersey has about 11,000 companies and 380,000 employees that ‘make stuff’ - ‘stuff we need’. The average New Jersey manufacturing firm is made up of at least 34 highly-productive, well-trained technical people. Many Global Pre-COVID-19 manufacturing indexes had the U.S. overtaking everyone, including the Chinese, in 2020. We’ll have to see what the recovery and rebound has in store for us. So, what happened? Well it’s kind of simple...we’ve destroyed our Supply Chain and this has been done over decades...no finger pointing required, as we’ve all been complicit.
Larger entities like Apple, 3M, GM, Big Pharma and many others have found a lower-priced option in places like China, Mexico and other areas of the globe. The cost component is a tenet of good business, but not single sourcing items. This is true especially during a crisis - how’s it been finding these right now: N95 & Surgical Masks Surgical Gowns Ventilators Medical and Food Grade Gloves How about all those medications, like blood pressure treatments that are now becoming more difficult to secure? Offshore? Bad Business...Dangerous Business...Deadly Business. Look, I’m not blaming companies for securing higher profits, but when a country, et al, does not plan out a complex process like manufacturing and allows others to dictate our safety...we all crash. Therefore, we all need to focus and gain back the ground lost. So this really is not a missive focused towards anyone, but rather our MFG/STEM/TLD Sectors - Company Owners and Employees - because if we remain silent and on the sidelines now, then we quickly fall back into the various modes of failure until the next time we all cry “bring back manufacturing!” That will be too late - again. Manufacturing Outlook / April 2020
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LETTERS TO THE EDITOR How do I know this isn’t happening? The NIST-MEP National Network (MEPNN) - the only Federal Program that has an ROI of 9:1 and that focuses on Small to Mid-Sized Manufacturing Firms has been ‘zeroed out’ in the Federal Budget over the past 3 years. ‘We’ then had to fight to get reinstated instead of focusing on our Mission. Thank goodness for the NJ Federal Delegations Support during this time. From my viewpoint, the CARES Stimulus package has over $14 billion for various Agricultural needs, but the MEPNN received $50 million and the MFGUSA Institutes another $10 million. NJMEP was able to secure $1.25 million for New Jersey companies. For perspective, that comes to about $110 per manufacturing firm. My point is not to downplay the importance of Farms in our lives, but to show the utter financial discrepancy between these two critical industries in the thinking of our elected officials in government. The 51 State-Based Centers in the MEPNN program are requesting additional funds to be shared amongst the States, but we’ll have to wait to see if that will happen. A great deal was said about companies like GM, GE, Ford, and Honeywell re-tooling to make ventilators, and my assumption is that they are being paid. To be honest - this is a positive - but what about the 500+ companies in NJ alone that have already stepped up to help. Many were chastised for not donating their goods. Others were not provided with the proper specifications and/or waivers from the FDA. And, they are no where near the size of those big companies that can absorb such a donation. We’re all talking about the heroes - medical personnel, 1st responders, and others - and yes, we should! They have stepped up big time, and I appreciate their sacrifices. Just like I appreciate those made by the Essential Manufacturers that have been quietly going to work and making the items that Protect Us / Medicate Us / Feed Us...every day as well.
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Manufacturing Outlook / April 2020
I remain hopeful that the gains that New Jersey (Governor, MFG Caucus, NJDOL, NJBAC, NJEDA) have taken over the past few years of investing in Manufacturing and STEM will not be lost in this recovery. Programs that support Tax and Red Tape Relief, Training, Apprenticeships, and yes, NJMEP, are critical to our recovery. The bottom-line here is clear: U.S. and New Jersey Manufacturing does not want a bail-out, but an investment and the respect that it deserves. However, if our industry chooses to sit back and watch things play out this time, we will all lose out. Our silence is not golden, or something to be proud of, but foolish. If we do not stand up and speak up for ourselves, then we deserve the negative outcome. Your choice.
John W. Kennedy, Ph.D. Chief Executive Officer New Jersey Manufacturing Extension Program, Inc. 2 Ridgedale Ave, Suite 305 Cedar Knolls, NJ 07927 Cell 201-506-0642 Email: jkennedy@njmep.org. Click Here for full bio.
MANUFACTURING TIDBITS
LINEN AND UNIFORM SERVICES RECOGNIZED AS ESSENTIAL SERVICES IN BATTLE WITH COVID-19 PANDEMIC by TR CUTLER
Health authorities and state and local governments are recognizing the linen, uniform and facility services industry as an essential service. Consisting mostly of small, independent family-owned and operated businesses, the industry supplies, launders and maintains essential, environmentally friendly reusable textiles for industries that need these most, including restaurants, hotels, healthcare facilities, manufacturing, infrastructure, other businesses and government agencies. In addition to linens and uniforms, personal protective equipment (PPE) as well as hygiene, first aid and other facility services, are provided. During quarantine/isolation mandates, the “essential services” designation allows laundries to stay open to serve other businesses designated as “essential” including those mentioned above plus grocery stores, food processing, home-based and long-term care, public utilities (water and energy),
first-responders, laboratories, pharmaceutical manufacturers and other fundamental supply chain businesses. Members of TRSA, the association that represents the $40-billion linen, uniform and facility services industry, are on the front line of providing clean, safe environments for their customers’ employees, customers and the general public, noted TRSA President and CEO Joseph Ricci. According to Joseph Ricci, President & CEO of TRSA, “Despite this designation and critical role of the textile services sector. We are seeing very different results from the impact of COVID-19. Companies serving healthcare facilities are nearly at capacity, but those serving restaurants and hotels are laying off workers. We anticipate sales to decline by $10 billion during the next three months, prompting the loss of between 80,000 to 100,000 jobs. Without Manufacturing Outlook / April 2020
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MANUFACTURING TIDBITS
aggressive and immediate action from the federal government, many laundries will close their doors, permanently eliminating providers of these essential services and leaving the country ill-prepared to rebound.” In San Francisco and Contra Costa County, Calif., health officers’ orders directing individuals to shelter in place indicates they may leave their residences to “engage in certain essential activities and work for essential businesses,” with laundromats, drycleaners, and laundry service providers classified as such businesses. A TRSA member in Wisconsin reported the applicability of a broader classification of “processing and distribution facilities” encompassing linen and uniform service, reflecting these large-scale laundries’ importance to public health and their greater resemblance to manufacturing plants and warehouses than retail establishments open to the public.
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Manufacturing Outlook / April 2020
Reusable equivalents are critical to mitigating COVID-19 impacts as shortages of disposable surgical gowns and drapes are possible given the likelihood of interrupted international supply chains and the preponderance of smaller medical facilities with limited storage capacity of these items. In contrast, reusable surgical textiles deployed and maintained according to their controlled life cycles and properly sterilized are less dependent on supply replenishment. Other linen and uniform service users highly susceptible to contamination include food manufacturers, laboratories, pharmaceutical manufacturers, and first responders. These businesses also take advantage of the industry’s provision of other hygiene-related products, including personal protective equipment (PPE) for their employees and facility services products such as cleaning chemicals.
MANUFACTURING TIDBITS
“Because our industry serves virtually every type of private- and publicsector organization across the economy, most Americans benefit at least once per week from the hygiene and safety of products we provide to our customers. This highlights the imperative that laundries be considered essential to a sound public health policy,� Ricci said. The industry consists of nearly 1,000 companies operating about 2,500 business locations. More than half of these companies have less than 20 employees. Wages are estimated at $19 billion and impact on gross domestic product (GDP) at $176 billion. The industry processes 15 billion pounds of laundry annually, including 90% of the linens, scrubs, gowns, barrier curtains and other reusable textiles used by healthcare facilities across the United States. Addressing COVID-19, TRSA is guiding members in continuing operations and disseminating accurate, relevant information to their respective customers, employees and the general public regarding the hygienically clean handling and processing of reusable textiles. Representing the industry in numerous regulatory matters at the state and federal levels, advocacy has accelerated to ensure the role of its operator members is considered essential by all policymakers. Author Profile Thomas R. Cutler is the founder of the 7000+ member Manufacturing Media Consortium and CEO of TR Cutler, Inc. Manufacturing Outlook / April 2020
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MANUFACTURING TIDBITS
ENGINEERING FROM HOME TO ASSIST IN THE COVID-19 PANDEMIC by TR CUTLER
It’s important to remember the strength and resiliency of our community in these tumultuous times. Beginning March 20th, Bantam Tools hosted, “Engineering from Home”, a weekly interactive livestream with engineers, designers, and makers. Particle.io engineer Mohit Bhoite and multidisciplinary designer Sophy Wong joined the first discussion. Additionally, across the globe, technologists, medical professionals, and members of the maker community are coming together to develop solutions to help combat the COVID-19 pandemic. Whether an engineer, doctor, editor, or digital fabricator, skills make a difference. Project Open Air is working to create medical devices, such as open-source ventilators, that can be
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Manufacturing Outlook / April 2020
reproduced and assembled locally worldwide. Open Source COVID-19 Medical Supplies Facebook group is the largest and fastest-growing community aimed at bringing people together to design, make, test, and source medical supplies based on local community needs. Coronavirus Tech Handbook is a crowdsourced resource for technologists building solutions related to the outbreak.
Author Profile Thomas R. Cutler is the founder of the 7000+ member Manufacturing Media Consortium and CEO of TR Cutler, Inc.
MANUFACTURING TIDBITS
A PANDEMIC SHOWS HOW ORGANIZATIONS CAN CHANGE...
...FASTER THAN THEY THINK
BY ANDREA BELK OLSON
The coronavirus has transformed our world virtually overnight. Companies have had to change on a dime how they operate and communicate. While this is an incredibly serious situation, it’s an opportunity for businesses to re-evaluate their approach to managing change going forward. So-called “traditional” organizations, where silos, structure, and hierarchy abound, where resistance to change is prevalent, are in for an even rougher road. Once we pass through the pandemic, there will be a major turning point. How do we become more agile, forward-thinking and proactive? How do we sustain an ability to adapt quickly and efficiently to unforeseen circumstances? We might believe this requires the ability to predict future challenges better, or improve the organization’s ability to work remotely, or even shore up supply chains. However, the real issue is the mentality of leadership. Having worked with an extensive amount of organizations on change, leadership is inherently slow to embrace it. This isn’t odd, as it’s human nature to resist change. But when push comes to shove - when there’s a catastrophe, when urgency is at its height, when leaders have no choice in the matter - they act. While hindsight is 20/20, organizations have multiple opportunities to make
simple to significant changes which can put them in a better position to weather a storm. Yet, many leaders push back, stating the change would be too disruptive, cost too much, or take too much work to implement. But now, there’s no choice in the matter. We can do better. We can use our corporate courage to embrace change before it is foisted upon us. We can be more open to new ideas and forwardthinking behaviors. We can foster inclusiveness, cross-train employees and empower them to make better decisions faster. We can create a resilient culture that thinks on their feet and is always looking for a smarter way to do things. I would challenge all organizational leaders to examine their organizational culture and think about how they will transform their companies out of this pandemic to be more adaptive, rather than embracing the status quo. Because as we know, change will come one way or another - and it’s much easier to handle if you’re primed for it. About the Author: This introspective essay was previously published on LinkedIn.com by Andrea Olson. In addition to writing and consulting, Andrea Olson speaks to leaders and industry organizations around the world on how to craft effective customer-centric organizations. More information is available on pragmadik.com or thecustomermission.com. Manufacturing Outlook / April 2020
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MANUFACTURING TIDBITS
Jacket Media Co’s Industry-Leading Manufacturing Podcast ranked #5 by FeedSpot.com by TIM GRADY On April 1, 2020, Manufacturing Talk Radio, broadcasting weekly since 2013, was ranked #5 on FeedSpot.com’s Top 15 Manufacturing Podcasts You Must Follow in 2020. Feedspot is a content reader for end users to read all their favorite websites in one place, where they can add all their favorite Blogs, News websites, RSS Feeds, Youtube Channels and Social sites accounts to their Feedspot account and read new updates from one place. Manufacturing Talk Radio has broadcast more than 400 shows which are available on its website, www. mfgtalkradio.com, and distributed through RSS feeds on many popular podcast listening platforms, including iTunes, Blubrry, Spreaker, Stitcher and others. The show covers economic forecasts, new product development, current technology, manufacturing trends, best practices, industry software, and additional topics in a conversational format between hosts Lew Weiss, Tim Grady and their guests, from industry thought leaders and
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Manufacturing Outlook / April 2020
respected experts, to members of Congress, the Department of Labor, the Department of Commerce, associations such as the National Association of Manufacturers, The Manufacturing Institute, and the Institute for Supply Management, as well as university administrators and industry executives. Several senior corr espondents, such as Dr. Chris Kuehl, Cliff Waldman, Norbert Ore, and supply chain thought leaders, including Tim Fiore and Anthony Nieves, present their insights on what is happening across both manufacturing and non-manufacturing to provide listeners with a better understanding of their contributions to America’s GDP. Manufacturing Talk Radio is one of five manufacturing-oriented podcasts produced by Jacket Media Co. The company highlights the experiences of women in manufacturing with it’s highly regarded WAM podcast to share the knowledge of accomplished female industry leaders with the rising stars of today and tomorrow. It presents deep dives into the underpinnings of the economics in Manufacturing Matters with Cliff Waldman, noted economist and well-known conference speaker. For a boots-on-the-ground experience inside the factories and manufacturing plants across the nation, JMC
MANUFACTURING TIDBITS work and at home, and how they manage to keep some balance, set manageable goals, and even give themselves a break every once in a while on Fulltime with Amy Nicklaus. All of these shows have been formatted to provide useful and actionable information in the world of Industry 4.0 and can be found at their respective websites, listed here for your reference. Manufacturing Talk Radio: mfgtalkradio.com WAM podcast: wampodcast.com produces Where’s Willie, hosted by William Miller, the National Marketing Manager at Koganei International America, Inc., a leader in air valves, air filters, regulators, vacuum equipment, actuators, pumps, processing devices, and other critical components in the manufacturing industry. And, host Amy Nicklaus of Nicklaus Marketing & PR chats with female professionals about their crazy, busy lives at
Manufacturing Matters with Cliff Waldman: mfgtalkradio.com Where’s Willie: whereswilliepodcast.com Fulltime with Amy Nicklaus: womenandmfg.com/full-time-with-amy-nicklaus
presents The Manufacturing & Business Podcast Network
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MANUFACTURING TIDBITS
CREATE A BETTER MANUFACTURING ENVIRONMENT THROUGH TWO-WAY RADIO TECHNOLOGY by Ben Burns
There is no doubt that titanic shifts are taking place in the $2.17 trillion behemoth industry called Manufacturing. Politics and pandemics aside, one of the major changes directly affecting the United States manufacturing industry is technology. Early forays into Artificial Intelligence (AI), Internet of Things (IoT), and Robotics Process Automation (RPA) are just the tip of the iceberg. Other technological advances like Configure Price Quote software and Direct to Consumer (D2C) marketing will be on the tip of everyone’s tongues in no time. However, despite these gargantuan leaps in technological overhauls, there is still one important manufacturing tool that technology can never replace: the two-way radio. In fact, more and more manufacturing professionals are incorporating two-way radio technology into their operations because radios continue to improve both productivity and safety throughout every phase of today’s manufacturing processing.
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Manufacturing Outlook / April 2020
The Evolution of Two-Way Radios Two-way radios have evolved significantly over the past 100 years but continue to be an indispensable tool for today’s manufacturing industry. From resolving plant-floor problems like a shortage of material on a production line to sudden changes in warehouse operations and transportation yards where gate assignments need to be switched on the fly, reliable two-way radio coverage is critical to maintain operational efficiency and being better prepared to respond rapidly to the unexpected. Digital Revolution Most of today’s professional grade two-way radios use digital technology rather than analog. Digital circuitry opens up a much more robust collection of features that can be very valuable to the manufacturing industry. One of these features is the built-in digital algorithm that can automatically
MANUFACTURING TIDBITS in the sound of machinery. Quality two-way radios, especially when equipped with headphones, can make the difference between the safe completion of a task and a dangerous accident. Efficiency – Two-way radios are the perfect tool for maximizing efficiency in any manufacturing setting. In fact, studies have found that two-way radios are so effective for manufacturing facilities that the equipment pays for itself in just a couple of months because of the amount of time they save. Unplanned down time caused by equipment malfunctions, spills, or other disruptions can cause a domino effect that will impact your operation’s output. differentiate between the human voice and background noise, allowing it to cancel undesirable background noise for clearer, cleaner sound quality. Another evolution in two-way radio equipment is that they can incorporate software applications that can integrate into existing computer networks and phone systems. As a result, digital two-way radios have the potential for incorporating a multitude of additional functions, including GPS, text messaging, and other forms of communication technologies and information sharing applications.
It doesn’t take much to stop operations unexpectedly, and that can be costly. Sometimes all it takes to figure out a quick solution and keep things moving is communication between two or more areas. Knowing where your people are in relation to where the problem has occurred can save time and money. Two-way radios can instantly connect multiple people which reduces response times when problems appear and improve results across the entire production line.
Safety – Accidents can happen when communication fails. A misunderstanding in instructions; a delay in reporting a hazardous situation; a call for assistance that fails to connect can all add up to trouble.
Productivity – Never before have manufacturers had to work so hard to do more in less time. Margins are under constant pressure, and in many cases plant managers are having to do more and more with less. Using two-way radios as a communication tool allows workers to instantly communicate with others and help them find quick solutions to problems that may occur. A recent survey by of manufacturing productivity said that 46% of manufacturing workers say that two-way radios reduces downtime by as much as 20%! In fact, there is virtually no area of a plant where using two-way radios doesn’t improve throughput and productivity.
Without professional communication tools, accidents can happen just because someone misunderstands an instruction. Two-way radios provide crystal clear audio in noisy manufacturing environments and can be equipped with hands free accessories and emergency features. Think about how noisy a plant can get, where shouted instructions get lost
Durability - Professional quality two-way radios are designed to withstand the abuse of hard-working manufacturing plants. They can withstand being dropped on concrete, in water, or even in dust. There is no way cellular phones can withstand this kind of treatment. Consumer radios by contrast are usually built for infrequent use: weekend hunting trips,
Core Benefits of Two-Way Radio Technology for Manufacturing Industry However, there are some very specific advantages of incorporating high-quality radios into any manufacturing environment, including:
Manufacturing Outlook / April 2020
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MANUFACTURING TIDBITS multiple car caravans, camping trips, amusement park visits, etc. They are lightweight with a thin plastic casing. Commercial radios are designed to be used for hours every day and are constructed with a heavy-duty commercial housing. Many are built to military specifications and are waterproof with significant transmitting power. Two-Way Radios In A Crisis Situation
Two-Way Radios are incredibly valuable tools for manufacturing facilities, but they are also one of the most important tools for crisis management as well. This is especially true for anyone who works in an isolated or remote area, or who works in potentially dangerous environments. In many situations, a cell phone won’t have the immediacy, dependability, or reliability in a crisis. There are three specific features of two-way radios that can greatly improve survivability in a true crisis situation. These include: The Man Down Feature The Man Down safety feature detects when there is a lack of movement or if the radio suddenly tilts horizontally, typical signs an accident or emergency is taking place. This application has to be programmed into the two-way radio and is designed to identify when a worker has fallen. When the radio senses lack of movement or a sudden horizontal tilt, a timer is activated which will initiate a “chirp” following a couple of seconds to notify other radio users that there could be an emergency. If the worker is fine but just accidentally tilted the radio, he/she can disable the alert without an emergency signal being sent.
20
Manufacturing Outlook / April 2020
However, if a full minute passes and the worker has not turned off the notification, an alarm will sound to other radios announcing that something is wrong and that the radio operator is unresponsive. The Lone Worker Feature Unlike the Man Down safety feature, the Lone Worker feature is triggered when a worker fails to interact with the radio for a specific period of time. For example, let’s say a worker doesn’t touch the radio for 10 minutes, a pre-warning signal will sound reminding the worker to reset the timer by pressing a button or adjusting a knob. If the worker doesn’t interact with the radio in the next couple of minutes, an emergency notification will be sent to other predesignated radio operators. Emergency Alert Button One of the simplest and most effective features for averting a crisis is called the Emergency Alert Button. Strategically located on the top of the radio for quick and easy access, the Emergency Alert Button triggers an alarm by pressing one button. Immediately, the radio sends out a voice and/or radio identity to notify specific individuals of an impending emergency. This drastically reduces response times and significantly contributes to a safer environment. These are just some examples of the many benefits of two-way radios in manufacturing plants. They are also widely used in field operations, outdoor facilities, remote buildings, in both the manufacturing and non-manufacturing sectors. When a cell phone is an ‘okay’ solution, consider two way radios as an excellent option. Author Profile
Ben Burns is the Founder and Chief Executive Officer of Discount TwoWay Radio. Based in Southern California, Discount Two-Way Radio serves more than 64,000 customers in the industries of manufacturing, warehousing, education, public safety, construction, and more. Discount Two-Way Radio is the exclusive North American distributor of RCA two-way radio equipment.
MANUFACTURING TIDBITS
COVID-19 PANDEMIC: FORCE MAJEURE IMPLICATIONS ON THE SUPPLY CHAIN FOR BUYERS AND SELLERS
by TR CUTLER
The anticipated risks and impact of the coronavirus outbreak on the supply chain industry cannot be overestimated.
performance under UCC Article 2 and when do the contract doctrines of frustration of purpose or impossibility of performance apply.
Legal questions are of particular relevance to companies with supply chain-focused issues. Both manufacturers and distributors need to know if force majeure clauses are enforceable. Many are asking how to defend contract performance without force majeure clauses as well as understanding the scope.
Buyers’ remedies for non-performance if force majeure or impracticability applies, need to be known as well as sellers’ remedies.
Understanding the impact of take-or-pay or non-cancellation clauses for excusal of contract performance is vital. Additionally, the impact of price-adjustment contract formulas on excusal of contract performance change daily. Several manufacturers need to know what circumstances constitutes impracticability of
Supply chain professionals must closely monitor leading health authorities, worldwide economic markets, global and national governments as well as business advisors, agency directives, community impact to be aware and armed with knowledge. Author Profile Thomas R. Cutler is the founder of the 7000+ member Manufacturing Media Consortium and CEO of TR Cutler, Inc. Manufacturing Outlook / April 2020
21
MANUFACTURING OUTLOOK
APRIL 2020
MANUFACTURING OUTLOOK by ROYCE LOWE
GLOBAL MANUFACTURING IN THE GRIP OF THE CORONAVIRUS. CHINA MAY BE CRAWLING ITS WAY OUT OF IT, BUT THE WESTERN WORLD IS SUFFERING.
As of the time of this writing, the total extent of the damage done to manufacturing and the world economy as a whole by COVID-19 is unknown. Much of the accessible data relates to things as they were in mid to late March. April’s figures will paint a truer picture. The BLS jobs report for March shows the loss of 701,000 non-farm payroll jobs. The unemployment rate was at 4.4 percent. Manufacturing lost 18,000 jobs, leisure and hospitality 459,000 jobs, health care and social assistance 61,000, professional and business services 52,000 and construction 29,000. It should be noted that these figures were for the weeks of March 8 and 15, in the weeks before the unemployment insurance claims increased by 3 million, and a further 3 million shortly thereafter.
22
Manufacturing Outlook / April 2020
MANUFACTURING OUTLOOK
The Bureau of Economic Analysis recently released its ‘third’ estimate for the annual rate of Real GDP growth in the fourth quarter of 2019, putting it at 2.1 percent. The figure for the third quarter of 2019 was 2.1 percent. The ISM PMI figure for U.S. manufacturing fell back from 50.1 percent in February to 49.1 percent in March. The overall economy grew for the 131st consecutive month. IHS Markit’s remarks on the U.S. show production and new orders down at the fastest pace since August 2009, and employment down at the quickest for over a decade. Business confidence was down to a series low. Average selling prices were down. The IHS PMI was at 48.5 in March, down from 50.7 in February.
and Unemployment Rates for what it considers the world’s major economies. These data are not necessarily good to the present day, but are mostly applicable to at least the past two months, and show definite trends in the world economy. The figures are qualified as being the latest available, and with reference to a given quarter or month. The figures for GDP represent the % change on the previous quarter, annual rate. The consumer price increases represent year-overyear changes. The unemployment figures, %, are for the month as noted.
U.S. LIGHT VEHICLE SALE All major automotive companies released sales figures for the first quarter. Here are the figures for sales of passenger cars and light vehicles. Tesla sold 13,400 vehicles in March, up 3 percent year-over-year, and 56,200 for the first quarter, up 19.8 percent yearover-year. THE ECONOMIST magazine, in its latest weekly report on world economies, highlights changes in Gross Domestic Product (GDP), Consumer Prices,
Manufacturing Outlook / April 2020
23
ISM REPORT OUTLOOK
THE INSTITUTE FOR SUPPLY MANAGEMENT’S MANUFACTURING REPORT ON ® BUSINESS
BREAKING NEWS
ISM PMI at 49.1% for March ISM PMI for the past 5 years
24
Manufacturing Outlook / April 2020
ISM REPORT OUTLOOK
reportonbusiness
Analysis by
Timothy R. Fiore, CPSM, C.P.M.,
Chair of the Institute for Supply Management® Manufacturing Business Survey Committee
ISM® Report On Business®: Manufacturing
Economic activity in the manufacturing sector contracted in March, and the overall economy grew for the 131st consecutive month, say the nation’s supply executives in the latest Manufacturing ISM® Report On Business®. The March PMI® registered 49.1 percent. The New Orders Index registered 42.2 percent, a decrease of 7.6 percentage points from the February reading of 49.8 percent. The Production Index registered 47.7 percent, down 2.6 percentage points compared to the February reading of 50.3 percent. The Backlog of Orders Index registered 45.9 percent, a decrease of 4.4 percentage points compared to the February reading of 50.3 percent. The Employment Index registered 43.8 percent, a decrease of 3.1 percentage points from the February reading of 46.9 percent. The Supplier Deliveries Index registered 65 percent, up 7.7 percentage points from the February reading of 57.3 percent. Comments from the panel were negative regarding the nearterm outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility. Of the 18 manufacturing industries, the 10 that reported growth in March — listed in order — are: Printing & Related Support Activities; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Wood Products; Paper Products; Chemical Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; and Plastics & Rubber Products.
‡Miscellaneous Manufacturing (products such as medical equipment and supplies, jewelry, sporting goods, toys and office supplies).
14
ISMMAGAZINE.ORG
PMI at 49.1% ®
PMI
Manufacturing contracted in March, 2018 2019 2020 as the PMI® registered 49.1 percent, a 1-percentage point decrease from the February reading of 50.1 percent. The PMI® contracted in March after expanding marginally in January and February. Three of the big 50% = Manufacturing Economy six industries expanded, with Food, Bever49.1% Breakeven Line age & Tobacco Products expanding strongly. 42.8% = Overall Economy Breakeven Line Only one (Supplier Deliveries) of the PMI®’s 10 subindexes recorded expansion, down from four the previous month. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.
Manufacturing at a Glance INDEX
Mar Index
Feb Index
% Point Change
Direction
Rate of Change
Trend* (months)
PMI®
49.1
50.1
-1.0
Contracting
From Growing
1
New Orders
42.2
49.8
-7.6
Contracting
Faster
2
Production
47.7
50.3
-2.6
Contracting
From Growing
1
Employment
43.8
46.9
-3.1
Contracting
Faster
8
Supplier Deliveries
65.0
57.3
+7.7
Slowing
Faster
5
Inventories
46.9
46.5
+0.4
Contracting
Slower
10
Customers’ Inventories
43.4
41.8
+1.6
Too Low
Slower
42
Prices
37.4
45.9
-8.5
Decreasing
Faster
2
Backlog of Orders
45.9
50.3
-4.4
Contracting
From Growing
1
New Export Orders
46.6
51.2
-4.6
Contracting
From Growing
1
Imports
42.1
42.6
-0.5
Contracting
Faster
2
Growing
Slower
131
Contracting
From Growing
1
Overall Economy Manufacturing Sector
*Number of months moving in current direction. Manufacturing ISM® Report On Business® data is seasonally adjusted for the New Orders, Production, Employment and Inventories indexes.
Commodities Reported Commodities Up in Price: Capacitors (2); Circuit Card Assemblies; Isopropyl Alcohol; Personal Protective Equipment (PPE) — Gloves; Resistors (2); Steel — Hot Rolled* (5); and Steel Products (2). Commodities Down in Price: Aluminum (2); Aluminum Products (3); Base Oils; Copper (2); Corrugate (2); Crude Oil (2); Diesel Fuel; Fuel; Heating Oil; Natural Gas (4); Oil Products; Plastic; Scrap (2); and Steel — Hot Rolled* (2). Commodities in Short Supply: Cleaning Wipes; Hand Sanitizer; Isopropyl Alcohol; Paper Towels; Personal Protective Equipment (PPE) — Gloves; PPE — Masks; and Toilet Paper. Note: The number of consecutive months the commodity is listed is indicated after each item.*Reported as both up and down in price.
Manufacturing Outlook / April 2020
25
ISM REPORT OUTLOOK
ISM Report On Business ®
®
manufacturing
March 2020 Analysis by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management ® Manufacturing Business Survey Committee
New Orders (Manufacturing) 2018
2019
52.5% = Census Bureau Mfg. Breakeven Line
2020
42.2%
New Orders ISM’s New Orders Index registered 42.2 percent. Of the 18 manufacturing industries, nine reported growth in new orders in March, in the following order: Wood Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Paper Products; Chemical Products; and Computer & Electronic Products.
Production (Manufacturing) 2018
2019
2020
ISM’s Production Index registered 47.7 percent. The seven industries reporting growth in production during the month of March — listed in order — are: Wood Products; Printing & Related Support Activities; Apparel, Leather & Allied Products; Primary Metals; Food, Beverage & Tobacco Products; Chemical Products; and Electrical Equipment, Appliances & Components.
47.7%
51.7% = Federal Reserve Board Industrial Production Breakeven Line
Production
Employment (Manufacturing) 2018
2019
2020
ISM’s Employment Index registered 43.8 percent in March, a decrease of 3.1 percentage points compared to the February reading of 46.9 percent. Of the 18 manufacturing industries, three reported employment growth in March: Printing & Related Support Activities; Food, Beverage & Tobacco Products; and Computer & Electronic Products.
50.8% = B.L.S. Mfg. Employment Breakeven Line
43.8%
Supplier Deliveries (Manufacturing) 53.1% 2018
Employment
2019
2020
Supplier Deliveries The delivery performance of suppliers to manufacturing organizations was slower in March, as the Supplier Deliveries Index registered 65 percent. The 16 industries reporting slower supplier deliveries in March — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Transportation Equipment; Primary Metals; Computer & Electronic Products; Paper Products; Petroleum & Coal Products; Machinery; Food, Beverage & Tobacco Products; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Nonmetallic Mineral Products; Furniture & Related Products; Miscellaneous Manufacturing‡; and Electrical Equipment, Appliances & Components.
65%
Inventories (Manufacturing) 2018
2019
2020
Inventories The Inventories Index registered 46.9 percent. The five industries reporting higher inventories in March are: Printing & Related Support Activities; Miscellaneous Manufacturing‡; Food, Beverage & Tobacco Products; Primary Metals; and Chemical Products.
44.3% = B.E.A. Overall Mfg. Inventories Breakeven Line
‡Miscellaneous
46.9%
Manufacturing (products such as medical equipment and
supplies, jewelry, sporting goods, toys and office supplies).
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Manufacturing Outlook / April 2020
ISM REPORT OUTLOOK
ISM Report On Business ®
®
manufacturing
March 2020 Analysis by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management ® Manufacturing Business Survey Committee
Customer Inventories (Manufacturing) 2018
2019
2020
Customers’ Inventories ISM’s Customers’ Inventories Index registered 43.4 percent in March, which is 1.6 percentage points higher than the 41.8 percent reported for February, indicating that customers’ inventory levels were considered too low. Of 18 industries, the only industry reporting higher customer inventories in March is Transportation Equipment.
43.4%
Prices (Manufacturing) 2018
2019
2020
The ISM Prices Index registered 37.4 percent in March, a decrease of 8.5 percentage points from the February reading of 45.9 percent, indicating raw materials prices decreased for the second consecutive month, at a much faster rate. The two industries reporting paying increased prices for raw materials in March are: Wood Products; and Computer & Electronic Products.
37.4%
52.5% = B.L.S. Producer Prices Index for Intermediate Materials Breakeven Line
Backlog of Orders (Manufacturing) 2018
2019
Prices
2020
Backlog of Orders ISM’s Backlog of Orders Index registered 45.9 percent. Six of the 18 industries reported growth in order backlogs in March, in the following order: Apparel, Leather & Allied Products; Wood Products; Paper Products; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; and Chemical Products.
45.9%
New Export Orders (Manufacturing) 2018
2019
2020
New Export Orders ISM’s New Export Orders Index registered 46.6 percent. The four industries reporting growth in new export orders in March are: Apparel, Leather & Allied Products; Paper Products; Chemical Products; and Miscellaneous Manufacturing‡.
46.6%
Imports (Manufacturing) 2018
2019
2020
Imports ISM’s Imports Index registered 42.1 percent in March, a decrease of 0.5 percentage point compared to the 42.6 percent reported for February. The four industries reporting growth in imports in March are: Wood Products; Nonmetallic Mineral Products; Food, Beverage & Tobacco Products; and Chemical Products.
42.1% ‡Miscellaneous
Manufacturing (products such as medical equipment and
supplies, jewelry, sporting goods, toys and office supplies).
Manufacturing Outlook / April 2020
27
CREDIT MANAGER’S OUTLOOK
CREDIT MANAGERS’ OUTLOOK by DR. CHRISTOPHER KUEHL MANAGING DIRECTOR OF ARMADA CORPORATE INTELLIGENCE THIS REPORT REPRINTED COURTESY OF THE NATIONAL ASSOCIATION OF CREDIT MANAGERS (NACM.ORG) WHERE MORE IN-DEPTH INFORMATION CAN BE FOUND.
Combined Sectors Needless to say, the world today is a far cry from the world that existed a month ago and it is not clear the world of tomorrow will be recognizable – at least for a while. The credit manager has truly become a crucial player in this environment – more than during other recessions. The companies that have been critical to the success of their own companies are suddenly faced with a shutdown that could last months and that has crippled their ability to pay their bills or even hang on to their employees. They will all become highly dependent on the relationships they have developed over the years and the credit managers will be faced with many challenges. The data this month is as bad as has been seen since the financial sector collapse in 2008 but thus far the numbers have not crashed into the 30s. This remains a possibility in months to come. The combined score for the CMI dropped to 49.0 and this measure has not been below the 50 line for years. This will be the story throughout this month’s assessment – record setting declines that will match the recession numbers in 2008 and 2009. The index of favorable factors has tumbled out of the sixties in drastic fashion as it is now reading 46.5 after sitting at 62.2 in February. The index of unfavorable factors likewise tumbled but not to the levels of the favorable. The full impact of the crisis has not yet hit many companies so
28
Manufacturing Outlook / April 2020
for the moment the damage has been somewhat limited – falling from 52.2 to 50.6. This reading is not expected to remain above 50 in subsequent months. The real damage can be seen in looking at the specific readings. The sales numbers plummeted from a high of 64.0 to 39.5 and this reading has not been this low in years. The new credit applications also cratered from 62.2 to 44.0. The dollar collections numbers followed suit with a reading of 49.3 after a reading of 58.8 the month prior. The only sector that did not fall into the forties was the amount of credit extended as it went from 63.6 to 53.2. In short there was very little to find favorable in the favorable data. That trend continues with the unfavorable readings but not quite as dramatically. The full impact of the business shutdown has not been felt although it will likely start to manifest in the weeks to come and in the next iteration of the CMI. The rejections of credit applications stayed almost where they had been with a reading of 53.5 compared to 53.8 in February. The accounts placed for collection numbers were exactly as they had been in February at 50.6. There has not yet been time for the crash in business activity to trigger actions as far as collection is concerned but most expect this to develop soon enough. The disputes numbers actually improved from
CREDIT MANAGERS’ OUTLOOK 50.3 to 52.1. There was a substantial decline as far as dollar amount beyond terms and that is no surprise. As companies are shut down, they are hoarding their cash reserves as aggressively as they can and they will be reluctant to keep on top of their credit. The dollar amount of customer deductions did not alter much – the reading this month was 50.5 and last month it was 51.5. The filings for bankruptcies also remained stable – 53.2 this month and 53.3 last month. This will likely be the last of the indicators to move. Manufacturing Sector The impact of the COVID 19 outbreak was felt by the manufacturing sector before it hit the country as a whole. This started out as a supply chain crisis for the US manufacturers as the heavy industrial of China was essentially shut down as early as January. It has since become a bigger concern with widespread business shutdowns across most of the country. The combined score for the manufacturing sector fell from 55.9 to 49.8 and these numbers have not been this low for several years. The combined favorable factors fell from 62.0 to 48.2, the lowest point reached in several years and as low as was seen during the recession of 2008-2009. The combined unfavorable reading didn’t alter appreciably. It was at 51.8 and is now at 50.8. As was discussed in the section above there has not been enough time for most business to react. The interruptions in business activity have developed in just the last two to three weeks and this is showing up in immediate data such as sales and credit
applications. Sales dropped drastically from 65.7 to 40.3 – nearing levels not seen since the recession in 2008. The new credit applications also fell like a stone as February’s numbers were at 61.4 and now, they are sitting at 45.0. The dollar collections numbers didn’t fall as dramatically but they are expected to in coming weeks as companies struggle with the shutdown and supply chain issues. The reading was at 58.3 and is now at 53.4 – still temporarily in positive territory. The amount of credit extended fell from 62.8 to 54.0 – still in positive territory but down considerably from where it had been. There has been less time for the unfavorable factors to register the impact of the shutdown. This will doubtless become an issue in the months to come. The rejections of credit applications actually improved a little by moving from 53.0 to 54.4. Those applications still arriving are generally coming from the better customers. The accounts placed for collection remained very close to where it had been before as there has not yet been time for many customers to get in trouble. The reading in February was 51.4 and this month it is 51.6. The disputes section also improved a little by going from 48.9 to 51.4 while most of the initial damage has been seen in the dollar amount beyond terms reading. Companies that have been hit by the sudden shutdown are not in a position to pay their creditors and are protecting their cash flow at all costs. The reading was at 54.2 in February and now sits at 44.3. The dollar amount of customer deductions actually improved a bit this month as the reading went from 49.8 to 51.3. As with most of the other readings there has not been time for the bankruptcy numbers to alter – the filings for bankruptcies moved from 53.3 to 52.0 but in future surveys there will likely be a substantial increase. Manufacturing Outlook / April 2020
29
NORTH AMERICAN OUTLOOK
APRIL 2020
NORTH AMERICAN OUTLOOK by ROYCE LOWE
30
Manufacturing Outlook / April 2020
NORTH AMERICAN OUTLOOK The Institute of Supply Management PMI figure slipped back to 49.1 in March from 50.1 in February. Production, new orders and employment are contracting; supplier deliveries are slowing faster and backlogs are contracting. Raw materials inventories are contracting, customer inventories are too low. Prices are down and exports and imports are contracting. Of the 18 manufacturing industries, the 10 that reported growth in March — listed in order — are: Printing & Related Support Activities; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Wood Products; Paper Products; Chemical Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; and Plastics & Rubber Products. The six industries reporting contraction in March, in order, are: Petroleum & Coal Products; Textile Mills; Transportation Equipment; Furniture & Related Products; Fabricated Metal Products; and Machinery. Comments from the industry for the most part cite the negative effects of the coronavirus and the attendant oil price war. The exception is Food, Beverage & Tobacco Products. Commodities Up in Price Capacitors (2); Circuit Card Assemblies; Isopropyl
Alcohol; Personal Protective Equipment (PPE) — Gloves; Resistors (2); Steel — Hot Rolled* (5); and Steel Products (2). Commodities Down in Price Aluminum (2); Aluminum Products (3); Base Oils; Copper (2); Corrugate (2); Crude Oil (2); Diesel Fuel; Fuel; Heating Oil; Natural Gas (4); Oil Products; Plastic; Scrap (2); and Steel — Hot Rolled* (2). Commodities in Short Supply Cleaning Wipes; Hand Sanitizer; Isopropyl Alcohol; Paper Towels; Personal Protective Equipment (PPE) — Gloves; PPE — Masks; and Toilet Paper. Note: The number of consecutive months the commodity is listed is indicated after each item. *Indicates both up and down in price. CANADA saw its production, new orders and employment fall at the fastest pace for at least nine-and-a-half years, in other words the sharpest downturn in overall manufacturing conditions in the nine-and-a-half years of data collection. The PMI fell from 51.8 in February to 46.1 in March. MEXICO saw its fastest fall in production in three months, but a drastic fall in new orders and a record low for business sentiment. The PMI for March was down from February’s 50.3 at 46.9.
ISO9100:2015 and AS9100D - Since 1994 - NIST SP 800-171 (Compliance Under Development)
800.600.9290 - 973.276.5000 - CANADA: 416.363.2244 - INFO@STEELFORGE.COM - STEELFORGE.COM
Manufacturing Outlook / April 2020
31
METALS OUTLOOK
APRIL 2020
METALS OUTLOOK by ROYCE LOWE
Steel production increased by 2.8 percent yearover-year in the month of February for the 64 reporting countries – which represent 99 percent of world crude steel production – to 143,296 MT. U.S. crude steel production for February was 7.168 MT, up 3.0 percent year-over-year. Canada produced 1.020 MT of crude steel in February, down 2.5 percent year-over-year. Brazil’s crude steel production for the month of February was 2.704 MT, a decrease year-over-year of 1.3 percent.
32
Manufacturing Outlook / April 2020
The UK produced 0.586 MT of crude steel in February, down 11.6 percent year-over-year. Crude steel production in Germany in February was at 2.920 MT, down 12.0 percent year-over-year; in Italy 2.046 MT, down 0.1 percent year-over-year; in France 1.232 MT, down 1.3 percent year-overyear and in Spain 0.710 MT, down 38.1 percent year-over-year. Russia’s crude steel production for February was at 5.615 MT, down 2.3 percent year-over-year; Ukraine’s was 1.709 MT, up 1.2 percent year-overyear.
METALS OUTLOOK CHINA produced 74.773 MT of crude steel in February, up 5.0 percent year-over-year; Japan 7.916 MT, up 2.2 percent year-over-year; India 9.560 MT, up 1.5 percent year-over-year and South Korea 5.380 MT, up 2.1 percent year-over-year. Taiwan produced 1.590 MT in February, down 5.5 percent. China’s Jingye Group has completed its purchase of British Steel, and will invest some $1.5 billion in electric arc furnace steelmaking, power plants and rail production - with a view to participation in Britain’s proposed HS2 line. The month of March saw the price of U.S. hotrolled coil swing from around $590 per ton to under $530 per ton, that of cold-rolled from around $750 per ton to just over $730 per ton. The price of C.R. coil took a dip in early April to $700 per ton. Regardless of price, steel mills around the world are not having the easiest time selling their products. Aluminum fell from $0.78 per lb in early March to $0.65 in early April; copper from $2.58 per lb to $2.20 per lb; nickel from $5.8 to 5.05 and zinc from $0.91 to 0.84. Primary Global Aluminum Production in February was reported at 5.112 million tons, with production in China, at 2.879 million tons, representing 56 percent of world total. Production was 475,000 tons in GCC; 332,000 tons in the rest of Asia; 263,000 tons in Western Europe; 314,000 tons in North America and 331,000 tons in Eastern and Central Europe. AND IN AUSTRIA… Austria’s voestalpine Steel Group is in the process of construction of a new steel complex in Kapfenberg that will, when completed in 2021, hold the title to the world’s most complete special steel facility. The company is investing up to 350 million euros in the plant, which will be capable of producing 205,000 tons per annum of special steels for the aerospace, automotive and oil and gas industries. The company operates globally and has some 500 Group companies in over 50 countries on all
five continents. It is heavily involved in all steel products, but particularly in specialty steels, and other metals. Voestalpine has an interesting, some might say notorious, history, being a pawn in Germany’s game during WWII and a further cause of disagreement between allies during Austria’s postwar occupation. The company was responsible for development of the Linz-Donawitz process, better subsequently known as the Basic Oxygen Process for steelmaking, based on Henry Bessemer’s 1858 patent. The site for the new plant, at 50,000 square meters, is the size of six soccer fields, and it revolves around an electric arc furnace, supplied by Germany’s SMS Group, that runs 100 percent on green electricity. The furnace melts ultra-pure scrap, and the molten steel finds its way to ladle furnaces for final alloy additions. Casting into ingot molds is fully automated. In addition to the 100 percent green electricity, an efficient recovery system ensures that heat generated during the melting process is used within the plant, as well as being fed into the public district heating network. Closed circuits will be used to cool production facilities, enabling a reduction of cooling water volume by up to 90 percent. This state-of-the-art plant will further set international standards in digitalized production processes. Some 8,000 process data will be recorded in parallel, and implemented or evaluated on an ongoing basis. Voestalpine has long been a leader in production and supply of all categories of tool steel. Its is presently one of the more environmentally responsible companies. Closer to home, voestalpine opened an HBI (hot-briquetted iron) plant in Corpus Christi, Texas in 2016. This plant, at 2 million tons annual capacity, produces direct-reduced iron pellets in a compacted form designed for ease of shipping, handling and storage. The reduction process involves natural gas converted to reducing gas, which is subsequently recycled. Hot briquettes are used as feed for electric furnace steelmaking. Manufacturing Outlook / April 2020
33
AEROSPACE OUTLOOK
APRIL 2020
AEROSPACE OUTLOOK
by ROYCE LOWE
There is no good news this month as far as commercial air travel is concerned, particularly not as regards the two major aircraft manufacturers, their suppliers, many of their employees and, of course, their customers, the airlines, who aren’t flying too many people anywhere at all. Boeing stopped manufacture and assembly of its infamous 737MAX in January because of all the problems with the plane, but now has the extra Covid-19 pandemic complication to contend with. As of late March, the company was making plans to resume production and was talking May, according to one of those sources who wishes to remain anonymous. Not likely, given current circumstances.
34
Manufacturing Outlook / April 2020
Boeing is also awaiting FAA clearance to resume commercial service. The software to which the two 737MAX crashes have been attributed is being reviewed by the FAA and the European Air Safety Administration (EASA) and other safety agencies. The FAA, EASA and other agencies are working with Boeing to document and test a new Maneuvering Characteristics Augmentation System (MCAS) software before approving resumption of passenger service. Boeing’s CEO says the work with the FAA is going well and that he is looking to start flying the 737MAX again in May. Meanwhile at Boeing’s plant in Seattle’s Puget Sound area, which employs 70,000 workers, there
AEROSPACE OUTLOOK
has been some unrest (in fact angst and anger) among some rank-and-file machinists, according to insiders. A number of workers have used an “Imminent Danger, Stop work” contract clause to halt specific jobs until safety concerns are addressed. One 777 work crew was sent home due to concerns of infection and mechanics on the next shift refused to work on the same jet as they weren’t sure the area had been properly cleaned.
Airbus, meanwhile, is going through similar challenges, closing plants in France and Spain and Tianjin, China, but finding time to fly two million masks into France from China. Both companies are looking for financial support from their respective governments. It’s a hard row to hoe for the airlines these days.
Manufacturing Outlook / April 2020
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AUTOMOTIVE OUTLOOK
APRIL 2020
AUTOMOTIVE OUTLOOK by ROYCE LOWE
Most of us have a tendency to look at new cars in a showroom to see what’s in there to make our lives easier, or our ride more comfortable. Is the GPS system of the best, can we read the screen easily, does the ‘guide’ speak clearly and give us directions we can understand? Is there lots of room for golf clubs once the family luggage is in there and can we easily attach a bicycle rack, in case the urge to get some exercise creeps up on us? That’s the kind of thing the customer looks for, and hence the kind of thing the designers must bear in mind when doing their job. There are a couple of other things that are of importance to both designer and customer, namely fuel consumption and safety. Strangely enough, these two parameters are linked together through the choice and application of the metals and materials that go to make up the automobile. In days of yore, when gas was around 30 cents a gallon, most parts of cars were made of mild steel, other parts of slightly higher carbon steel or low alloy steel. Fuel consumption was something to
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Manufacturing Outlook / April 2020
which people didn’t give a second thought; 10 mpg, 15 mpg, who cared? The cars were heavy, but that was part of the equation; heavy probably meant safe, at least until Ralph Nader came along. The auto body was made of mild steel in those days, bumpers of a steel with 50,000 psi yield strength, and the bits underneath, the chassis, of heavy, carbon steel sections. There was no competition for the American car save for the odd Volkswagen Beetle and Mini that one saw chugging their way around. Then came the Arab oil embargo, the so-called energy crisis, and the shock of a draconian increase in the price of gas. At some point in the 80s/90s, several gasprice increases on, it became clear that fuel consumption was an important factor in the automobile business. This, coupled with the rise of the Japanese and German imports into the U.S., made the weight of a car, along with technological advances to its motor, of prime importance. Steelmakers and fabricators were brought on board to contribute to a solution.
AUTOMOTIVE OUTLOOK High-strength, low-alloy, flat-rolled steels were not new. They had been around for years as a means of providing improved yield strength, even to 80,000 p.s.i., whilst retaining a reasonable degree of ductility. But advances in steelmaking, vacuum degassing, and ladle metallurgy, had made possible the manufacture of higher strength steels, again with good ductility. This led to the era of advanced high-strength steels (AHSS) and ultra high-strength steels (UHSS) and other associated grades. The aim was increased strength of auto body parts, and an accompanying allowable reduction in their thickness - due to their increased strength - leading to significant improvements in both safety and fuel consumption. Along with reduced fuel consumption goes a reduction in carbon dioxide emissions. Certain steels, good candidates from a strength point of view, were judged unsuitable because of difficulties in stamping. Parts could be stamped, but displayed an unacceptable ‘spring back,’ meaning they would not stay in their intended shape, due to their very high yield strengths. In 1977, a Swedish company (Plannja) developed and patented a hot stamping process which they used for saw blades and lawn mower blades. In 1984, Saab Automobile used the process for a hardened boron steel component for the Saab 9000. Three million hot stamped parts were produced in 1987, eight million in 1997, over 100 million in 2007, and the process has become more widely adopted over the past decade. The hot stamping process involves heating a blank to around 900C (1650F), then transferring it to a water-cooled die, where the part is both stamped to shape and quickly cooled, thus forming martensite, thus increasing the properties of a steel with a typical analysis of 0.23% C, 1.3% Mn, 0.003% boron from a nominal 50,000 p.s.i.yield strength, 80,000 p.s.i. tensile strength to 150,000 p.s.i. yield strength, 220,000 p.s.i. tensile strength; elongation is around 6%. In the event that the part to be produced is even too complex for this hot stamping process, it may be cold formed prior to heating, then finish formed and quenched. All major parts of an automobile, from the front and rear bumpers, to the underside, sides and roof may be produced by hot stamping. Collaboration between steelmakers, tool and die makers and automobile companies has long enabled improvement in the quality of the end product. Advances in the properties and formability of flat-rolled steel for the auto industry will continue, to the benefit of all. Long may this continue. Manufacturing Outlook / April 2020
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ISSUES OUTLOOK
APRIL 2020
ISSUES OUTLOOK by ROYCE LOWE
At the end of the nineteenth century, only 4-5 percent of American doctors were women. Some men no doubt put this down to a lack of aptitude on women’s part. Many medical schools, perhaps of a similar opinion, did not admit female candidates at the time, and Harvard’s began accepting women only after WWII. Women in Britain were not allowed to practice as lawyers: four women passed the Law Society exam in 1922, and on December 18 of that year, the first woman solicitor was admitted to the bar. In 1920, America granted women the constitutional right to vote. (In Britain, women over 30 were allowed to vote in 1918, those over 21 in 1928.) Women have made great strides in the past 50 years, but many still feel their progress is being obstructed. It seems that women are constantly being told that they need to change themselves, to be more assertive, to work longer hours. It is actually suggested that a major reason women are held back is that even those who are employed full-time are still expected to do the bulk of the housework. There is a tendency on the part of many males to downplay female talents, insisting instead they “look the part.” There are, for example, different dress standards, viz Boris Johnson’s tousled hair, and his scruffily-dressed adviser who sloughs his appearance off as ‘genius.’ There is no doubt that a woman running for political or executive power would not be allowed such eccentricities.
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Manufacturing Outlook / April 2020
ISSUES OUTLOOK her position. In 2018, Fortune Magazine named her the ‘most powerful woman in the world.’ She will remain on the board as executive chair pending reelection, presumably to keep a watchful eye on her replacement.
In the UK, women make up 61 percent of graduating law classes, yet just 17 percent of British law firm partners are women. Female lawyers win more cases, but trail in compensation by 20 percent. The Economist Magazine publishes a glass-ceiling index, which it recently updated, ranking 29 countries on ten indicators of equality for women in the workplace: educational attainment, laborforce participation, pay, child-care costs, maternity and parenting rights, business school applications, and representation in senior jobs (in management positions, on company boards and in ‘parliament.’) In the overall ranking, Iceland came out on top, followed by Sweden, Finland, Norway, France, and Denmark. Canada was in 12th place, the U.S. in 22nd and Britain in 23rd.
We know that very capable women are making great careers for themselves in manufacturing. The trick for the future is to ensure for them, and for their colleagues in other disciplines, their merited equitable treatment.
The complete survey may be seen at economist.com/ glassceiling2020. The U.S., Britain and Canada have a high percentage of women in managerial positions. So the question is, why is the gender wage gap so marked, and what will it take to improve it in the near-to-medium future. As an aside to this survey, the CEO of Lockheed Martin - since 2013 - recently stepped down from
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Manufacturing Outlook / April 2020
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ENERGY OUTLOOK
APRIL 2020
ENERGY OUTLOOK by ROYCE LOWE
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Manufacturing Outlook / April 2020
ENERGY OUTLOOK In early March this year, the U.S. government awarded a $39.7 million contract to three firms to design ‘micro-reactors’ capable of supplying a few megawatts of power to remote military bases, and of being moved quickly by road, rail, sea or air. The small reactor concept is not new, and in fact in July 1951, five months before a reactor in Idaho became the world’s first to produce electricity through fission, America started construction of the USS Nautilus, a nuclear-powered submarine. In the 1960s and 1970s small reactors powered bases in Alaska and Greenland, a radar facility in Wyoming, a research station in Antarctica and from a cargo ship - the Panama Canal Zone.
Russia is presently using larger floating reactors for its nuclear-power icebreakers, and China plans installation of similar equipment on disputed islands in the South China sea. The planned ‘micro-reactors’ are intended to be factory assembled and shipped in one piece. They should weigh under 45 tons and fit onto the back of an articulated truck. Proponents of the technology say the risks involved are manageable. The reactors would be shielded and protected, and possibly placed in a hole in the ground. The Pentagon says a nuclear meltdown would be “physically impossible.”
Interest in land-based mini-reactors has been awakened by recent wars where American forces require lots of energy. Fuel accounted for over a third of the tonnage transported to the Iraq war theatre, and between 2001 and 2010, over half of U.S. casualties in Iraq and Afghanistan occurred during land transport missions, many involving fuel deliveries to remote outposts. Hence the reopening of the mini-reactor playbook. U.S. armed forces use some 30 terawatt hours of electricity per year - about the same as Ireland - and almost ten million gallons of fuel per day. Demand for electricity will increase with the advent of more sophisticated weapons and the strong probability that U.S. brigades will move to electric vehicles in the coming years. A recent army report says that a prototype mobile nuclear reactor would be 62 percent cheaper than liquid fuel. NASA is developing smaller reactors for space missions, designed to power small lunar outposts. Manufacturing Outlook / April 2020
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GLOBAL PMI OUTLOOK
GLOBAL PMI OUTLOOK
by NORBERT ORE, DIRECTOR, HEAD OF INDUSTRIAL SURVEYS, STRATEGAS RESEARCH PARTNERS GAME CHANGED: GLOBAL SLUMP DRIVEN BY SOFT DEMAND.
MARCH 2020 BUSINESS SURVEY INSIGHTS In the United States, Manufacturing began contracting in August and that ran through December 2019. During the first quarter, the ISM Manufacturing PMI® has averaged out right at the mid-point. Meanwhile the ISM NonManufacturing PMI® has shown remarkable resilience as it averaged above 55 for the first quarter. In China, both surveys (CFLP and Caixin) saw a massive decline in February and then leveled to the mean in March. The Eurozone countries registered a combined 44.5 in March with Germany falling to 45.4.
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Manufacturing Outlook / April 2020
The ISM PMI: In March, the U.S. Manufacturing PMI® (49.1, -1.0) dipped below 50 following two months of fractional expansion to start the year. The past relationship between the PMI and the overall economy indicates that the PMI for March (49.1) corresponds to a 1.8 percent increase in real gross domestic product on an annualized basis, according to the ISM press release. We want to note, this is based on the historical relationship between the ISM Manufacturing PMI® and U.S. Gross Domestic Product. It does not include provisions for the impact of the Covid-19 Global Pandemic which has already radically disrupted supply and demand. Drivers: The PMI® signaled minor contraction and little change (in this case decline). Supplier Deliveries (65.0, +7.7) was the only index above the mid-point in this report. A Supplier Deliveries reading above 50 is typically associated with improving demand. However, the strong Supplier Deliveries reading may
GLOBAL PMI OUTLOOK be misleading in this instance as deliveries are slower due to plant closures, limited operating hours, and supply shortages. Given the state of the other indexes,
Assemblies; Isopropyl Alcohol; Personal Protective Equipment (PPE) — Gloves; Resistors (2); Steel — Hot Rolled* (5); and Steel Products (2).
we believe slowing delivery times are an indication of weakness at this time. New Orders Minus Inventories: This key measure (-4.7, -8.0) shows New Orders (42.2) are contracting
Commodities Down in Price: Aluminum (2); Aluminum Products (3); Base Oils; Copper (2); Corrugate (2); Crude Oil (2); Diesel Fuel; Fuel; Heating Oil; Natural Gas (4); Oil Products; Plastic; Scrap (2); and Steel — Hot Rolled* (2).
faster than Inventories (46.9). Compared to the average gap (+7.0 pp beginning in 2011), a significant inventory correction needs to take place. Customers’ Inventories: Transportation Equipment was the only industry reporting higher customer inventories in March. Twelve industries reported customers’ inventories as too low: Apparel, Leather & Allied Products; Wood Products; Textile Mills; Paper Products; Chemical Products; Plastics & Rubber Products; Furniture & Related Products; Computer & Electronic Products; Fabricated Metal Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; and Machinery. Prices: The Prices Index (37.4, -8.5) largely reflects the recent fall in prices of metals and energy sources. Commodities Up in Price: Capacitors (2); Circuit Card
Commodities in Short Supply: Cleaning Wipes; Hand Sanitizer; Isopropyl Alcohol; Paper Towels; Personal Protective Equipment (PPE) — Gloves; PPE — Masks; and Toilet Paper. Note: Parentheses indicate the number of consecutive months the commodity is listed. Asterisk indicates both up and down in price. Sectoral Breakdown: Of 18 manufacturing industries, 10 reported growth in March: Printing & Related Support Activities; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Wood Products; Paper Products; Chemical Products; Computer & Electronic Products; Primary Metals; Miscellaneous Manufacturing; and Plastics & Rubber Products. Six industries reported contraction: Petroleum & Coal Products; Textile Mills; Transportation Equipment; Furniture & Related Products; Fabricated Metal Products; and Machinery.
Manufacturing Outlook / April 2020
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EUROZONE OUTLOOK
GLOBAL OUTLOOK
EUROZONE by ROYCE LOWE
IHS Markit’s Eurozone Manufacturing Composite Purchasing Managers’ Index (PMI) fell from 49.2 in February to 44.5 in March. Production and new orders were lower and purchasing was down. The supplier delivery performance was the worst since April 2009, and there was the worst employment reduction in over a decade. European car and SUV registrations are forecast to fall almost 20 percent in 2020 due to the coronavirus. Passenger car sales were down 7.4 percent in February. In January/February, seven percent of European car sales were plug-ins. IHS Markit’s PMI for the UK fell from 51.7 in February to 47.8 in March.
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Manufacturing Outlook / April 2020
Production and new orders were down at the quickest rate since mid-2012. Business optimism fell to a series-record low and supply-chain disruption continued to deteriorate. Employment fell for the eleventh time in the past twelve months and at the fastest rate since July 2009.
ASIA OUTLOOK
GLOBAL OUTLOOK
ASIA OUTLOOK by ROYCE LOWE
CHINA saw a broad stabilization of business conditions with renewed production, but new orders fell for a second straight month. The manufacturing sector is optimistic regarding an increase in production over the next year. March saw a further reduction in employment, though the rate of decline eased since February. The PMI for March rose to 50.1 from February’s 40.3. China’s vehicle sales for February fell 79 percent to 310,000 units. New Energy Vehicle sales also suffered heavy losses. The China Association of Automobile Manufacturers expects a 10 percent drop in sales for the first half of 2020 and a 5
percent drop for the whole year, providing the coronavirus continues to be contained. JAPAN saw its lowest production for almost nine years, and its sharpest drop in demand since April 2011. Supply chain issues intensified. Employment fell for the first time since September 2015. There was price deflation on both input and output. Their PMI fell from February’s 47.8 to 44.8 in March. INDIA saw softer increases in both production and new orders, and a record decline in new export orders. Their PMI fell from 54.5 in February to 51.8 in March. Manufacturing Outlook / April 2020
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SOUTH AMERICAN OUTLOOK
GLOBAL OUTLOOK
SOUTH AMERICA by ROYCE LOWE
BRAZIL saw reductions in production, new orders and employment. The PMI fell from 52.3 in February to 48.4 in March. The JP MORGAN GLOBAL MANUFACTURING PMI – a composite index produced by JPMorgan and IHS Markit in association with ISM and IFPSM (International Federation of Purchasing and Supply Management) – recovered slightly from February’s 47.2 to 47.6 in March, due almost entirely to stabilization in China. Production, new orders and new export orders all contracted across consumer, intermediate and investment goods sectors, with the steepest reduction in investment goods.
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Manufacturing Outlook / April 2020
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