Is the Manufacturing Industry Growing or Slowing?
A couple of months ago I started to hear of machine shops going out of business and even hearing from some of our vendors that their business was also slowing down. CrossWind, however, had so much work that our machinists were all working 50+ hours a week and still scrambling to keep up with customer demand. Our shop is (at the moment) 100% medical device components. Not that we stay away from other industries, that’s just the niche we’ve found ourselves in. Unfortunately, we’re not killing ourselves trying to complete all jobs on time like we were in recent history. Now we’ve found ourselves just trying to get enough work in to avoid laying people off. We’ve even had calls from one of our biggest material vendors asking if we needed to order anything. We’re not a very big shop so I know we aren’t one of their largest customers. For them to be calling us looking for orders, they’ve got to be in a similar boat as we are. Also, talking to one of our tool suppliers, our sales rep. says that everyone else is really slow also. On one hand it’s nice to know that it’s not just us, but when the whole industry slows down it is extremely scary. We don’t want a repeat of 2008.
So, why is it that when I went looking for news articles, blogs, etc on reasons why the market was slow, did I not really find any reason? As a matter of fact, I found the opposite. I read many articles that talked about the industry growing. I did find one article that talked about global manufacturing starting to recover (read article by Yahoo Finance), but almost everything else I read talked about growth. I honestly believed that with the 2 year suspension of the Medical Device Excise Tax that would jump-start growth, but I’m not seeing that as of yet.
Is this possibly a “trickle down” effect from the oil industry? Has it made people become afraid to spend their money because they don’t know how the oil prices are going to affect their pocket books in the next few months? Michael Levi of the Council on Foreign Relations said in an interview that “what we see historically is that when oil prices are volatile, when they move a lot, either up or down, people become very uncertain.” Another theory for the slow-down is that it’s an election year. Stock markets often perform badly in an election year because a new president means uncertainty, especially if a new party will be replacing the current one. You can read an article on this from CNBC here.
All in all, my question remains, is the manufacturing industry growing or slowing? It seems to be slowing. If it is, why is it so hard for me to find information on the cause of this slowing trend? Why does everything seem to be telling me that it’s growing? Is it wishful thinking? Is it propaganda? Or is it just that the large companies are growing while the small guy is shrinking? Whatever the reason, I'd just love to see a light at the end of this, hopefully, short tunnel and let our machinists and QA dept get back to some normal hours. Give me your thought. I’d love to hear them!