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U.S. manufacturing expansion still showing positive signs

Two manufacturing reports signal that manufacturing continues in expansion mode. January's Manufacturing Business Survey report from the Institute for Supply Management (released Feb. 1) reveals that the manufacturing sector expanded for the 18th consecutive month.

"The manufacturing sector grew at a faster rate in January as the Purchasing Management Index [PMI] registered 60.8%, which is its highest level since May 2004 when the index registered 61.4%," stated Norbert J. Ore, chair of the Institute for Supply Management's Manufacturing Business Survey Committee. "The continuing strong performance is highlighted as January is also the sixth consecutive month of month-over-month growth in the sector. New orders and production continue to be strong, and employment rose above 60% for the first time since May 2004. Global demand is driving commodity prices higher, particularly for energy, metals, and chemicals."

Of the 18 manufacturing industries the survey covers, 14 reported growth in January. Unfortunately, the plastics segment was not one of those. The Plastics & Rubber Products category reported a contraction in January. The other downside to the report is that purchasing managers reported that all commodities were up in price. Steel, stainless steel, and aluminum were up for the fifth consecutive month—not great news for moldmakers.

However, both the Fabricated Metal Products and Machinery categories showed growth. One respondent in the Fabricated Metal Products category noted, "January/February sales will be decent, and we see a strong March. We're cautiously optimistic but reluctant to hire."

The fact that the metal fabricators are doing well might be why the December U.S. Manufacturing Technology Consumption (USMTC) report from The Assn. for Manufacturing Technology (AMT) and the American Machine Tool Distributors' Assn. showed a huge jump from November—with sales up 40.9% for a total of $446.76 million. That's an increase of 104.8% when compared with the total of $218.16 million for December 2009. With a year-to-date total of $3.236 million, 2010 is up 85.2% compared with 2009.

"For the first time in USMTC history, we experienced four months of consecutive growth following IMTS [International Machine Tool Show], ending the year on a solid upswing," said Douglas K. Woods, president of AMT. "2010 orders closed strong, up 85% over 2009, and December's orders were 40.9% higher than the previous month. With backlogs firming and quotation levels accelerating, we are very optimistic that the industry will see strong results in 2011." —Clare Goldsberry

TAGS: Business
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