Sidney Hill, Jr.: Let's fix our economic state of mind

These are tough times to be in manufacturing. All of the factors contributing to the current global recession have fallen right on top of this sector. The tightening of credit and consumers' fear of losing jobs has brought automobile production to a screeching halt. Manufacturers of other durable goods, such as household appliances, are booking fewer orders these days.

03/01/2009


These are tough times to be in manufacturing. All of the factors contributing to the current global recession have fallen right on top of this sector.

The tightening of credit and consumers' fear of losing jobs has brought automobile production to a screeching halt. Manufacturers of other durable goods, such as household appliances, are booking fewer orders these days. Steel producers and other companies that supply materials for manufactured goods are suffering as well.

While these things are common knowledge, it still was startling to see some of the numbers related to the economy that have hit my desk over the past few weeks. Among them:

  • A report about a CFO Magazine survey in which 81 percent of U.S.-based respondents—and 85-percent of respondents from Europe and Asia—were pessimistic about how the economy would perform in 2009; and

  • A durable goods report from PREVEL Consulting noting that the auto industry's current capacity utilization rate, at 25 percent, marks a historic low.

    • "We've never seen anything like this," the PREVEL report stated.

      I agree with that statement, but I also have decided that I've seen enough.

      While I can't do anything about the state of the economy, I can do something about my state of mind. So instead of continuing to pore over gloomy statistics and dire prognostications, I decided to start looking for good economic news.

      I uncovered the first nugget of good news in that same PREVEL report, which says the housing industry has sold off nearly its entire excess inventory. That's good news because it means housing prices should start to stabilize, and with mortgage rates still at historic lows, buyers may start trickling into the market. Even better news, says PREVEL, these new buyers will have to meet tighter standards to acquire loans—meaning they are less likely to default and create a new crisis. If this scenario holds true, it will eventually lead to new demand for household goods, and improved business conditions for durable goods manufacturers.

      Other bits of good news were found at Purchasing.com , which like Manufacturing Business Technology, is part of the Reed Business Information family.

      Staying with the housing theme, Purchasing cited a U.S. Commerce Department report that said privately owned housing starts were 22 percent higher in February than they had been in January. Single-family home starts were 1.1 percent above January, the report stated, while privately owned home completions were 2.3 percent higher.

      Additionally, the report said, building permits were up 3 percent.

      These things may or may not have been related to a statement made by Ian Christmas, director general of the World Steel Association, in early March. Speaking at the Reuters Global Mining and Steel Summit in London, Christmas said global steel inventories are "very low" and he expects demand to rise before year's end.

      I don't know if his timetable is correct, but I do know Christmas is correct in saying the downturn will end. The only question is how we react until then. At this point, as Christmas told attendees at the mining and steel summit, "Everybody's overdoing the pessimism."



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.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Doubling down on digital manufacturing; Data driving predictive maintenance; Electric motors and generators; Rewarding operational improvement
2017 Lubrication Guide; Software tools; Microgrids and energy strategies; Use robots effectively
Prescriptive maintenance; Hannover Messe 2017 recap; Reduce welding errors
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Infrastructure for natural gas expansion; Artificial lift methods; Disruptive technology and fugitive gas emissions
Mobility as the means to offshore innovation; Preventing another Deepwater Horizon; ROVs as subsea robots; SCADA and the radio spectrum
Research team developing Tesla coil designs; Implementing wireless process sensing
Commissioning electrical systems; Designing emergency and standby generator systems; Paralleling switchgear generator systems
Natural gas engines; New applications for fuel cells; Large engines become more efficient; Extending boiler life

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.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
Featured articles highlight technologies that enable the Industrial Internet of Things, IIoT-related products and strategies to get data more easily to the user.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me