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Recession Puts Renewed Focus on Brand Development
Recession Puts Renewed Focus on Brand Development
Conference Board reports manufacturers need to make brand strategy adjustments amid declining consumer loyalty.
March 10, 2010
ABB Wins $20 Million Order in China
Toyota Forms 'Quality Taskforce' in Wake of Safety Woes
EFCA Survey: Employers Need to Step Up Awareness Efforts
Philippine Imports Post Highest Growth in Seven Years
Sweden Ranked World's Most Networked Economy
Taiwan Semiconductor to Open New Plant for Energy-saving Technology
More News »The economic downturn coupled with corporate misdeeds has soured consumer trust in businesses and their product lines, meaning manufacturers need to re-evaluate their brand strategies, according to a report released March 10 by the Conference Board.
Brands will be more difficult for corporations to manage in the post-recession economy, said John Dodds, director of global brand and communications for specialty gasses manufacturer Air Products and Chemicals Inc. and chair of The Conference Board Council of Corporate Brand Management.
"Companies simply won't be able to do things the way they always have," he said. "But they can succeed by adapting their brand strategy to reflect what changes the recession has brought to their business and what it might mean for customers. This will poise them for growth when the economy rebounds."
In the future, consumers will be more educated buyers and have much less brand loyalty or trust than before, according to the report, "Corporate Brands - Meeting the Challenges of Changing Times." Complicating matters for companies is the proliferation of social media Web sites that have enabled consumers to share information that often criticizes corporate brands.
Marketers will need to communicate to their CEOs the link between the brand and revenue and customer preservation, according to Jeffrey Burchill, CFO of FM Global, who addressed the Council as a guest. Executives may know there is positive value in corporate name recognition and a strong brand, but they are unsure how that relates to the bottom line, he said.
Branding professionals need to focus on strategy and impact related to revenue and customer retention in the short term and potential growth in the long term, Burchill said.
"Talk the language that the C-suite and especially the CFO understands, not the jargon of marketing and brand positioning," Burchill said.
Conference Board reports manufacturers need to make brand strategy adjustments amid declining consumer loyalty.
March 10, 2010
ABB Wins $20 Million Order in China
Toyota Forms 'Quality Taskforce' in Wake of Safety Woes
EFCA Survey: Employers Need to Step Up Awareness Efforts
Philippine Imports Post Highest Growth in Seven Years
Sweden Ranked World's Most Networked Economy
Taiwan Semiconductor to Open New Plant for Energy-saving Technology
More News »The economic downturn coupled with corporate misdeeds has soured consumer trust in businesses and their product lines, meaning manufacturers need to re-evaluate their brand strategies, according to a report released March 10 by the Conference Board.
Brands will be more difficult for corporations to manage in the post-recession economy, said John Dodds, director of global brand and communications for specialty gasses manufacturer Air Products and Chemicals Inc. and chair of The Conference Board Council of Corporate Brand Management.
"Companies simply won't be able to do things the way they always have," he said. "But they can succeed by adapting their brand strategy to reflect what changes the recession has brought to their business and what it might mean for customers. This will poise them for growth when the economy rebounds."
In the future, consumers will be more educated buyers and have much less brand loyalty or trust than before, according to the report, "Corporate Brands - Meeting the Challenges of Changing Times." Complicating matters for companies is the proliferation of social media Web sites that have enabled consumers to share information that often criticizes corporate brands.
Marketers will need to communicate to their CEOs the link between the brand and revenue and customer preservation, according to Jeffrey Burchill, CFO of FM Global, who addressed the Council as a guest. Executives may know there is positive value in corporate name recognition and a strong brand, but they are unsure how that relates to the bottom line, he said.
Branding professionals need to focus on strategy and impact related to revenue and customer retention in the short term and potential growth in the long term, Burchill said.
"Talk the language that the C-suite and especially the CFO understands, not the jargon of marketing and brand positioning," Burchill said.
Old-school manufacturing leads U.S. recovery
Old-school manufacturing leads U.S. recovery
Improbable as it seems, the brightest spot so far in the nation's spotty economic recovery is a sector long considered all but dead — good-old-fashioned manufacturing.
By Don Lee
Tribune Washington Bureau
WASHINGTON — Improbable as it seems, the brightest spot so far in the nation's spotty economic recovery is a sector long considered all but dead — good-old-fashioned manufacturing.
Factories are churning. Exports are up. Even though jobs are the bleakest aspect of the overall economy these days, factory payrolls have turned positive.
"We could have a renaissance here," said Ron Bloom, President Obama's manufacturing czar.
"Indeed," Federal Reserve Chairman Ben Bernanke declared late last month, "manufacturing has been leading the recovery so far."
The basis for that optimism is emerging companies such as Nanosolar in San Jose, Calif., which is riding a wave of demand for "green energy" equipment, as well as established firms such as Intel and Boeing that are investing billions in U.S. production facilities.
Even old-line manufacturers such as Caterpillar and General Motors are calling back workers.
But after years of losses to foreign competition, can U.S. manufacturing really turn around and power the nation back to long-term prosperity? Just replacing the 2 million-plus factory jobs lost in the past two years would be noteworthy.
U.S. industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase, according to a report by the Federal Reserve. The manufacturing sector produced less due to winter storms, falling 0.2 percent, but is expected to rebound in March.
The United States' industrial might, however, has been declining for decades. From shoes and socks and televisions in past years to flat-panel displays, advanced ceramics and robotics in more recent times, one product after another has been transformed from "Made in the U.S.A." to "Made Overseas."
Manufacturing's share of the economy, meanwhile, dropped to 11.5 percent in 2008 from 21 percent in 1979.
The result has been the loss of what historically has been the foundation of modern economies — making things people want to buy.
"I don't know where we go when we don't make anything and send our dollars elsewhere," laments Robert Gates, senior vice president at Clipper Windpower of Carpinteria, Calif.
His company has little choice but to buy wind-turbine components from abroad, mainly Asia.
In the wake of the Great Recession that was rooted partly in Americans' heavy borrowing and purchases of foreign-made goods, Obama is trying to lay the foundations of a new U.S. economy, one built more on savings and producing, not spending and importing.
He wants to double exports in five years and increase research and development investment to more than 3 percent of the nation's economic output, which would be the highest since the Kennedy administration.
Obama wants to make tax credits for private investment in research and experimentation permanent. And he has promised to get tough with trading partners who don't play fair and open their markets.
Many manufacturers like what they're hearing but remain skeptical. The massive federal budget deficits will hamper spending on economic development for years, and many business leaders doubt the government can play a major role.
Optimists point to the nation's abundance of private capital and its history of turning creative ideas into commercial products.
They point to continued U.S. leadership in such key industries as aerospace, biotech, optical communications and memory chips.
Intel's $2.5 billion retooling of its wafer plant in New Mexico, for example, will soon make a 32-nanometer processor, two generations ahead of the chip that Intel's new China factory will churn out this year.
But planting green shoots such as Intel's wafer plant or the cluster of high-tech research labs and production plants established by IBM and others along the Hudson River in New York state is one thing. Rebuilding manufacturing on the scale that once undergirded U.S. prosperity is another.
The problem goes far beyond the oft-cited factor of lower labor costs overseas, already a diminishing factor in world trade.
For one thing, as manufacturing declined, so did the supply chains, support firms, capital investment and, perhaps most important, research and development.
In the United States, government policies have tended to be neutral or even negative when it came to the manufacturing base. China, by contrast, invests heavily in R&D and subsidizes manufacturing.
Without industrial clusters, in which production lines, labs and suppliers feed off one another, the U.S. risks losing more of the wealth generated from making higher-value goods, said Willy Shih, a Harvard Business School professor.
"At the end of the day, how much of those (software and marketing) services can we sell, and will it offset all the stuff we import?" Shih said.
Some economists and business analysts argue that it's all right to let manufacturing dwindle, as long as Americans continue to innovate, design and market products well. In a service economy, where things are made isn't so important, they said.
Some experts cite Apple as a prime example of a company that sends manufacturing and assembly offshore but profits handsomely from its design, software and global brand image. That may be good for Apple's bottom line, critics said, but not for the U.S. employment picture.
"Apple captures the profits, but somebody else captures the jobs," said Richard McCormack, publisher of Manufacturing & Technology News.
U.S. factory jobs today average about $18.40 an hour.
Other experts argue that something even more important is lost when manufacturing disappears: future opportunities. Without domestic production, they said, it's hard to induce commercialization of ideas and new applications of existing technologies.
Information from The Associated Press was included in this report.
Improbable as it seems, the brightest spot so far in the nation's spotty economic recovery is a sector long considered all but dead — good-old-fashioned manufacturing.
By Don Lee
Tribune Washington Bureau
WASHINGTON — Improbable as it seems, the brightest spot so far in the nation's spotty economic recovery is a sector long considered all but dead — good-old-fashioned manufacturing.
Factories are churning. Exports are up. Even though jobs are the bleakest aspect of the overall economy these days, factory payrolls have turned positive.
"We could have a renaissance here," said Ron Bloom, President Obama's manufacturing czar.
"Indeed," Federal Reserve Chairman Ben Bernanke declared late last month, "manufacturing has been leading the recovery so far."
The basis for that optimism is emerging companies such as Nanosolar in San Jose, Calif., which is riding a wave of demand for "green energy" equipment, as well as established firms such as Intel and Boeing that are investing billions in U.S. production facilities.
Even old-line manufacturers such as Caterpillar and General Motors are calling back workers.
But after years of losses to foreign competition, can U.S. manufacturing really turn around and power the nation back to long-term prosperity? Just replacing the 2 million-plus factory jobs lost in the past two years would be noteworthy.
U.S. industrial production edged up 0.1 percent in February, beating expectations and marking the eighth straight monthly increase, according to a report by the Federal Reserve. The manufacturing sector produced less due to winter storms, falling 0.2 percent, but is expected to rebound in March.
The United States' industrial might, however, has been declining for decades. From shoes and socks and televisions in past years to flat-panel displays, advanced ceramics and robotics in more recent times, one product after another has been transformed from "Made in the U.S.A." to "Made Overseas."
Manufacturing's share of the economy, meanwhile, dropped to 11.5 percent in 2008 from 21 percent in 1979.
The result has been the loss of what historically has been the foundation of modern economies — making things people want to buy.
"I don't know where we go when we don't make anything and send our dollars elsewhere," laments Robert Gates, senior vice president at Clipper Windpower of Carpinteria, Calif.
His company has little choice but to buy wind-turbine components from abroad, mainly Asia.
In the wake of the Great Recession that was rooted partly in Americans' heavy borrowing and purchases of foreign-made goods, Obama is trying to lay the foundations of a new U.S. economy, one built more on savings and producing, not spending and importing.
He wants to double exports in five years and increase research and development investment to more than 3 percent of the nation's economic output, which would be the highest since the Kennedy administration.
Obama wants to make tax credits for private investment in research and experimentation permanent. And he has promised to get tough with trading partners who don't play fair and open their markets.
Many manufacturers like what they're hearing but remain skeptical. The massive federal budget deficits will hamper spending on economic development for years, and many business leaders doubt the government can play a major role.
Optimists point to the nation's abundance of private capital and its history of turning creative ideas into commercial products.
They point to continued U.S. leadership in such key industries as aerospace, biotech, optical communications and memory chips.
Intel's $2.5 billion retooling of its wafer plant in New Mexico, for example, will soon make a 32-nanometer processor, two generations ahead of the chip that Intel's new China factory will churn out this year.
But planting green shoots such as Intel's wafer plant or the cluster of high-tech research labs and production plants established by IBM and others along the Hudson River in New York state is one thing. Rebuilding manufacturing on the scale that once undergirded U.S. prosperity is another.
The problem goes far beyond the oft-cited factor of lower labor costs overseas, already a diminishing factor in world trade.
For one thing, as manufacturing declined, so did the supply chains, support firms, capital investment and, perhaps most important, research and development.
In the United States, government policies have tended to be neutral or even negative when it came to the manufacturing base. China, by contrast, invests heavily in R&D and subsidizes manufacturing.
Without industrial clusters, in which production lines, labs and suppliers feed off one another, the U.S. risks losing more of the wealth generated from making higher-value goods, said Willy Shih, a Harvard Business School professor.
"At the end of the day, how much of those (software and marketing) services can we sell, and will it offset all the stuff we import?" Shih said.
Some economists and business analysts argue that it's all right to let manufacturing dwindle, as long as Americans continue to innovate, design and market products well. In a service economy, where things are made isn't so important, they said.
Some experts cite Apple as a prime example of a company that sends manufacturing and assembly offshore but profits handsomely from its design, software and global brand image. That may be good for Apple's bottom line, critics said, but not for the U.S. employment picture.
"Apple captures the profits, but somebody else captures the jobs," said Richard McCormack, publisher of Manufacturing & Technology News.
U.S. factory jobs today average about $18.40 an hour.
Other experts argue that something even more important is lost when manufacturing disappears: future opportunities. Without domestic production, they said, it's hard to induce commercialization of ideas and new applications of existing technologies.
Information from The Associated Press was included in this report.
Monday, March 1, 2010
Recovery Soon to Lose "Jobless" Label
Wednesday, February 24, 2010
The expansion of the U.S. economy is on track for a resumption of job gains in the near term and sustained growth over the next two years that will slightly exceed the economy’s trend pace, according to a report recently released by The National Association for Business Economics (NABE). NABE panelists characterize the outlook as largely a traditional economic recovery—with sizable gains in discretionary spending by businesses and households—though still restrained by past wealth losses and excessive indebtedness.
“We see a healthy expansion under way, although it will take time to reduce economic slack and repair damaged balance sheets,” said NABE President Lynn Reaser, chief economist at Point Loma Nazarene University.
The NABE forecast panel expects the economic recovery to remain firmly on track. Real GDP growth of 3.1 percent is projected over the four quarters of 2010, nearly identical to last November’s prediction of 3.2 percent. That pace is also expected for 2011, comparing favorably with the panel’s 2.7 percent assessment of the economy’s underlying trend.
NABE panelists are more optimistic in predicting the economy is already strong enough to begin creating jobs in the first quarter, compared to November's forecast of no net change in employment. The median forecast of the survey is for an average monthly increase of 50,000 jobs in the January through March period. The survey expects the jobless rate to be at a still high 9.6% in the final three months of 2010, even as around 100,000 jobs are created on average each month this year.
When asked to qualitatively characterize the economic recovery, panelists ascribed to no dominant view but suggested a variety of characterizations. The most popular view, by a small margin, describes the outlook as a traditional economic expansion in its early phase, with above-trend growth and gradually firming inflationary pressures. Only nine of the panelists firmly hold this position, however. Many NABE panelists fear that financial headwinds will hold growth short of what might typically be expected. Very few foresee a “stagflation” scenario— blending of slow growth and high inflation—with none regarding this scenario as very likely.
While “financial headwinds” are expected to remain problematic, they are also likely to abate. Specifically, bank lending is expected to become less restrictive over the course of 2010, as bank earnings and economic conditions improve, according to 70 percent of respondents. Thirty percent, alternatively, believe conditions will remain restrictive due to regulatory guidance, capital pressures and a general climate of risk aversion.
The expansion of the U.S. economy is on track for a resumption of job gains in the near term and sustained growth over the next two years that will slightly exceed the economy’s trend pace, according to a report recently released by The National Association for Business Economics (NABE). NABE panelists characterize the outlook as largely a traditional economic recovery—with sizable gains in discretionary spending by businesses and households—though still restrained by past wealth losses and excessive indebtedness.
“We see a healthy expansion under way, although it will take time to reduce economic slack and repair damaged balance sheets,” said NABE President Lynn Reaser, chief economist at Point Loma Nazarene University.
The NABE forecast panel expects the economic recovery to remain firmly on track. Real GDP growth of 3.1 percent is projected over the four quarters of 2010, nearly identical to last November’s prediction of 3.2 percent. That pace is also expected for 2011, comparing favorably with the panel’s 2.7 percent assessment of the economy’s underlying trend.
NABE panelists are more optimistic in predicting the economy is already strong enough to begin creating jobs in the first quarter, compared to November's forecast of no net change in employment. The median forecast of the survey is for an average monthly increase of 50,000 jobs in the January through March period. The survey expects the jobless rate to be at a still high 9.6% in the final three months of 2010, even as around 100,000 jobs are created on average each month this year.
When asked to qualitatively characterize the economic recovery, panelists ascribed to no dominant view but suggested a variety of characterizations. The most popular view, by a small margin, describes the outlook as a traditional economic expansion in its early phase, with above-trend growth and gradually firming inflationary pressures. Only nine of the panelists firmly hold this position, however. Many NABE panelists fear that financial headwinds will hold growth short of what might typically be expected. Very few foresee a “stagflation” scenario— blending of slow growth and high inflation—with none regarding this scenario as very likely.
While “financial headwinds” are expected to remain problematic, they are also likely to abate. Specifically, bank lending is expected to become less restrictive over the course of 2010, as bank earnings and economic conditions improve, according to 70 percent of respondents. Thirty percent, alternatively, believe conditions will remain restrictive due to regulatory guidance, capital pressures and a general climate of risk aversion.
MHIA Forecasts 6.0-8.5% Growth in Material Handling Equipment New Orders in 2010
Monday, February 22, 2010
Material handling equipment orders contracted 37.4% in 2009 are are forecasted to grow 6.0-8.5% in 2010, according to the latest Material Handling Equipment Manufacturing Forecast (MHEM) released by Material Handling Industry of America (MHIA).
“Industrial production activity is increasing even though factory operating rates (utilization) remain very low by historical comparison,” said Hal Vandiver, MHIA executive vice president of business development. “MHIA believes that demand created as the economy shifts from recession into recovery mode (filling supply chain pipelines, re-establishing inventories, and responding to pent up demand) is the principal impetus for improvement over the next few quarters in manufacturing, warehousing and distribution.”
In addition, material handling equipment shipments contracted 34.4% in 2009 and are forecasted to grow 1.0 to 2.0% in 2010. Domestic demand (shipments plus imports less exports) contracted 34.7% in 2009 and will grow 1.0 to 2.0% in 2010. Exports and imports will improve in 2010 at about the same rate.
The MHEM forecast of material handling equipment manufacturing is released each quarter by MHIA and looks 12 to 18 months forward to anticipate changes in the material handling and logistics marketplace.
MHIA is an international trade association that has represented the material handling and logistics industry since 1945. MHIA members include material handling and logistics equipment and systems manufacturers, integrators, consultants, publishers, and third party logistics providers. Member companies come from all areas of material handling and various parts of the world, making MHIA a strong national and international representative for the material handling and logistics industry. Much of the work of the industry is done within its product-specific Industry Groups. The association sponsors trade events, such as ProMat 2011 and NA 2010 to showcase the products and services of its member companies and to educate manufacturing, distribution and supply chain professionals on the productivity solutions provided through material handling and logistics.
Material handling equipment orders contracted 37.4% in 2009 are are forecasted to grow 6.0-8.5% in 2010, according to the latest Material Handling Equipment Manufacturing Forecast (MHEM) released by Material Handling Industry of America (MHIA).
“Industrial production activity is increasing even though factory operating rates (utilization) remain very low by historical comparison,” said Hal Vandiver, MHIA executive vice president of business development. “MHIA believes that demand created as the economy shifts from recession into recovery mode (filling supply chain pipelines, re-establishing inventories, and responding to pent up demand) is the principal impetus for improvement over the next few quarters in manufacturing, warehousing and distribution.”
In addition, material handling equipment shipments contracted 34.4% in 2009 and are forecasted to grow 1.0 to 2.0% in 2010. Domestic demand (shipments plus imports less exports) contracted 34.7% in 2009 and will grow 1.0 to 2.0% in 2010. Exports and imports will improve in 2010 at about the same rate.
The MHEM forecast of material handling equipment manufacturing is released each quarter by MHIA and looks 12 to 18 months forward to anticipate changes in the material handling and logistics marketplace.
MHIA is an international trade association that has represented the material handling and logistics industry since 1945. MHIA members include material handling and logistics equipment and systems manufacturers, integrators, consultants, publishers, and third party logistics providers. Member companies come from all areas of material handling and various parts of the world, making MHIA a strong national and international representative for the material handling and logistics industry. Much of the work of the industry is done within its product-specific Industry Groups. The association sponsors trade events, such as ProMat 2011 and NA 2010 to showcase the products and services of its member companies and to educate manufacturing, distribution and supply chain professionals on the productivity solutions provided through material handling and logistics.
Analyzing the Buy Cycle for Marketers
Globalspec recently conducted an Industrial Buy Cycle Survey of engineering, technical, manufacturing and industrial professionals who have influence on their company's processes for buying products and services. the white paper analyzes the responses and explains specific implications the buy cycle has for marketers.
Click on http://www.globalspec.com/wp/wp_buycycle.pdf for full details
Click on http://www.globalspec.com/wp/wp_buycycle.pdf for full details
Monday, February 1, 2010
Businesses Expect to Increase Hiring and Capital Spending in First Half 2010
U.S. businesses plan to increase hiring and capital spending in the first half of this year, according to a survey released by The National Association for Business Economics (NABE).
“NABE’s January 2010 Industry Survey provides new evidence that the U.S. recovery from the Great Recession continues, albeit at a slow pace,” said William Strauss, Federal Reserve Bank of Chicago. “Industry demand edged higher from the October 2009 report with an improved view towards growth in 2010. While input costs have been increasing, prices have also been moving higher, allowing profits to continue to improve. Job losses have been moderating with a slightly improved outlook for hiring over the next six months. Capital spending has continued to improve from very low readings following the start of the financial crisis. Improving credit conditions might be part of the explanation, with many respondents indicating that credit still remains tight but less so than in recent months.”
For the full article please click below:
http://www.mhia.org/news/industry/9432/businesses-expect-to-increase-hiring-and-capital-spending-in-first-half-2010
“NABE’s January 2010 Industry Survey provides new evidence that the U.S. recovery from the Great Recession continues, albeit at a slow pace,” said William Strauss, Federal Reserve Bank of Chicago. “Industry demand edged higher from the October 2009 report with an improved view towards growth in 2010. While input costs have been increasing, prices have also been moving higher, allowing profits to continue to improve. Job losses have been moderating with a slightly improved outlook for hiring over the next six months. Capital spending has continued to improve from very low readings following the start of the financial crisis. Improving credit conditions might be part of the explanation, with many respondents indicating that credit still remains tight but less so than in recent months.”
For the full article please click below:
http://www.mhia.org/news/industry/9432/businesses-expect-to-increase-hiring-and-capital-spending-in-first-half-2010
US Manufacturing Surges in January to Highest Level Since August 2004
PMI at 58.4%
Monday, February 01, 2010
Economic activity in the manufacturing sector expanded in January for the sixth consecutive month, and the overall economy grew for the ninth consecutive month, according to the January Manufacturing Institute for Supply Management (ISM) Report On Business®.
"The manufacturing sector grew for the sixth consecutive month in January as the PMI rose to 58.4 percent, its highest reading since August 2004 when it registered 58.5 percent," according to Norbert J. Ore, CPSM, C.P.M., chair of the ISM Business Survey Committee.
"This month's report provides significant assurance that the manufacturing sector is in recovery, said Ore. "It appears that it is sustainable," he added.
"Both the New Orders and Production Indexes are above 60 percent, indicating strong current and future performance for manufacturing. This month, 13 of 18 industries reported growth, up from nine industries last month, and this is a good indication that the impact of the recovery is expanding."
"The past relationship between the PMI and the overall economy indicates that the PMI for January (58.4 percent) corresponds to a 5.5 percent increase in real gross domestic product (GDP) on an annual basis," according to Ore. After worrying that the recovery would be tepid, Ore said he's now changed his mind. "This looks like a typical recovery, where we see strong growth in the front of it," Ore said.
The 13 manufacturing industries reporting growth in January — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; and Plastics & Rubber Products. Furniture & Related Products is the only industry reporting contraction in January.
New Orders
ISM's New Orders Index registered 65.9 percent in January, 1.1 percentage points higher than the seasonally adjusted 64.8 percent registered in December. This is the seventh consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
The 14 industries reporting growth in new orders in January — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Machinery; Wood Products; Paper Products; Food, Beverage & Tobacco Products; Primary Metals; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; and Chemical Products. The four industries reporting decreases in new orders in January are: Furniture & Related Products; Petroleum & Coal Products; Plastics & Rubber Products; and Printing & Related Support Activities.
Production
ISM's Production Index registered 66.2 percent in January, which is an increase of 6.5 percentage points from the December reading of 59.7 percent (seasonally adjusted). An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. This is the eighth consecutive month the Production Index has registered above 50 percent.
The 15 industries reporting growth in production during the month of January — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Fabricated Metal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Paper Products; Machinery; Primary Metals; Computer & Electronic Products; and Chemical Products. The only industry reporting a decrease in production in January is Furniture & Related Products.
Monday, February 01, 2010
Economic activity in the manufacturing sector expanded in January for the sixth consecutive month, and the overall economy grew for the ninth consecutive month, according to the January Manufacturing Institute for Supply Management (ISM) Report On Business®.
"The manufacturing sector grew for the sixth consecutive month in January as the PMI rose to 58.4 percent, its highest reading since August 2004 when it registered 58.5 percent," according to Norbert J. Ore, CPSM, C.P.M., chair of the ISM Business Survey Committee.
"This month's report provides significant assurance that the manufacturing sector is in recovery, said Ore. "It appears that it is sustainable," he added.
"Both the New Orders and Production Indexes are above 60 percent, indicating strong current and future performance for manufacturing. This month, 13 of 18 industries reported growth, up from nine industries last month, and this is a good indication that the impact of the recovery is expanding."
"The past relationship between the PMI and the overall economy indicates that the PMI for January (58.4 percent) corresponds to a 5.5 percent increase in real gross domestic product (GDP) on an annual basis," according to Ore. After worrying that the recovery would be tepid, Ore said he's now changed his mind. "This looks like a typical recovery, where we see strong growth in the front of it," Ore said.
The 13 manufacturing industries reporting growth in January — listed in order — are: Apparel, Leather & Allied Products; Textile Mills; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Paper Products; Nonmetallic Mineral Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Electrical Equipment, Appliances & Components; Wood Products; Fabricated Metal Products; and Plastics & Rubber Products. Furniture & Related Products is the only industry reporting contraction in January.
New Orders
ISM's New Orders Index registered 65.9 percent in January, 1.1 percentage points higher than the seasonally adjusted 64.8 percent registered in December. This is the seventh consecutive month of growth in the New Orders Index. A New Orders Index above 50.2 percent, over time, is generally consistent with an increase in the Census Bureau's series on manufacturing orders (in constant 2000 dollars).
The 14 industries reporting growth in new orders in January — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Machinery; Wood Products; Paper Products; Food, Beverage & Tobacco Products; Primary Metals; Electrical Equipment, Appliances & Components; Nonmetallic Mineral Products; Miscellaneous Manufacturing; Transportation Equipment; Fabricated Metal Products; Computer & Electronic Products; and Chemical Products. The four industries reporting decreases in new orders in January are: Furniture & Related Products; Petroleum & Coal Products; Plastics & Rubber Products; and Printing & Related Support Activities.
Production
ISM's Production Index registered 66.2 percent in January, which is an increase of 6.5 percentage points from the December reading of 59.7 percent (seasonally adjusted). An index above 51 percent, over time, is generally consistent with an increase in the Federal Reserve Board's Industrial Production figures. This is the eighth consecutive month the Production Index has registered above 50 percent.
The 15 industries reporting growth in production during the month of January — listed in order — are: Textile Mills; Apparel, Leather & Allied Products; Plastics & Rubber Products; Miscellaneous Manufacturing; Food, Beverage & Tobacco Products; Printing & Related Support Activities; Nonmetallic Mineral Products; Fabricated Metal Products; Transportation Equipment; Electrical Equipment, Appliances & Components; Paper Products; Machinery; Primary Metals; Computer & Electronic Products; and Chemical Products. The only industry reporting a decrease in production in January is Furniture & Related Products.
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