Efficiency improvements a recession breaker?

Though it came a bit later to the automation industries than to much of the rest of the economy, the recession has definitely settled in and doesn’t appear to be on its way to lifting any time soon. Everyone in the industry knew this inevitable slowdown would come, but what surprised many was the swiftness with which it arrived.


Though it came a bit later to the automation industries than to much of the rest of the economy, the recession has definitely settled in and doesn’t appear to be on its way to lifting any time soon.

Everyone in the industry knew this inevitable slowdown would come, but what surprised many was the swiftness with which it arrived. As late as October and even early November 2008, when speaking with various automation executives, official and off-the-record comments maintained that the industry outlook still looked good despite looming recessionary clouds.

By late November and into early December, the tone changed dramatically. Gone were the “knock on wood, we’re still looking good” quotes. Replacing this cautiously optimistic outlook was a clear sense of uncertainty about the future.

While speaking with automation industry executives and representatives in late January and early February of 2009, a few things became clearer. First is that while many projects have been postponed, very few have been taken off the board completely. The concern now is whether these projects will be put back on line over the next quarter or two. If that occurs as expected, further dramatic adjustments in the automation and control industries will likely be unnecessary.

The second thing I heard more than once is that funds that had been set aside by manufacturers for efficiency improvement projects—ranging from installation of drives for better motor control to software implementation for improved tracking of energy use—are still very much pending. The word on these projects is that they are not currently on hold due to the lack of visibility in the markets, but rather due to the expectation that additional incentives may be on the way from the Obama administration that would add to the bottom line benefit of these initiatives.

Real world experience seems to be supporting this more bullish tone surrounding sustainability-related projects. For example, building and engineering supplier Alumasc (a company operating in the hard hit construction industry) actually experienced a 1% growth in revenue during the last half of 2008. The company attributed its improved performance to the sustainable building market, which provided two-thirds of its first-half revenue.

Alumasc chief executive Paul Hooper said, “I think in the circumstances of a challenging marketplace, particularly on the engineering side, we are relatively pleased. In the context of a pretty big reduction in engineering and a decline in manufacturing, it’s not too bad a performance.”

Likewise, California’s solar and renewable energy industry continues to grow dramatically. The amount of investment in clean tech in the state nearly doubled from 2007 to 2008, reaching as high as $3.3 billion. “Solar installations under the California Solar Initiative were up 100% in 2008, with the last quarter being among the busiest on record,” says Adam Browning, executive director of Vote Solar.

In a decidedly down market, sustainability clearly appears to be one bright point. Is your company capitalizing on this?


No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Safer human-robot collaboration; 2017 Maintenance Survey; Digital Training; Converting your lighting system
IIoT grows up; Six ways to lower IIoT costs; Six mobile safety strategies; 2017 Salary Survey
2016 Top Plant; 2016 Best Practices on manufacturing progress, efficiency, safety
Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Big Data and bigger solutions; Tablet technologies; SCADA developments
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
What controller fits your application; Permanent magnet motors; Chemical manufacturer tames alarm management; Taking steps in a new direction
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Motion control advances and solutions can help with machine control, automated control on assembly lines, integration of robotics and automation, and machine safety.
This article collection contains several articles on preventing compressed air leaks and centrifugal air compressor basics and best practices for the "fifth utility" in manufacturing plants.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
click me