Favorable Forecast: Manufacturing Trends for Which to be Thankful

By: John Mills

Judging by the data and the trends, 2014 is shaping up to be the sort of year North American manufacturers can be grateful for.

Late fall brought North American manufacturers plenty of reasons to be grateful. In the United States, November production as measured by the Institute for Supply Management rose from 56.4 to 57.3, the fastest expansion since April 2011 (see article on page 2). Over the same period, Canadian manufacturing as measured by the RBC Purchasing Managers Index slipped from 55.6 to 55.3. Still, times are good: any score over 50 represents growth.

Can the good times continue? In the U.S., new orders have come in strong for four consecutive months, indicating a healthy production backlog heading into 2014. Here are five trends that could be helping to fuel demand and keep factory managers from taking too many vacation days:

• Improvements in 3-D printers. Additive manufacturing has emerged as a legitimate alternative to the line. One report says 3-D printers accounted for 28.3% of final part production in 2012, up from 3.9% a decade ago, and a huge portion of the $2.2 billion spent on additive manufacturing last year. Investments in cutting-edge additive processes could help your floor win more profitable business in the year ahead.
• Business returning from China. We’ve been seeing this for a few months now. Businesses that had hoped for significant cost savings from overseas production are bringing complex projects home. To be fair, November saw some growth among Chinese producers, but at 51.4, the local index lags gains being made here in North America.
• More ‘real-time’ enterprises. Business is moving faster, which means more rapid prototyping and profitable short-term engagements for advanced floors. All the more reason to set up an R&D shop near your line and get more staffers up to speed with 3-D printing and other additive techniques.
• The rise of the project economy. Shorter cycles also mean more projects, which, in turn, means not being tied down to a single customer or product as was frequently the case in years past. The downside? Such arrangements can be lucrative, guaranteeing work for a certain number of months or years.
• More access to data. Analytics are available at a scale not before seen thanks to big names such as IBM and innovators such as Tableau. Not taking ‘big fish’ clients would be riskier if it weren’t for the variety of tools and technology these companies offer for measuring profits, productivity, and capacity in real-time, allowing floor managers to adjust as conditions change.

No one has perfect foresight, of course. But judging by the data and the trends, 2014 is shaping up to be the sort of year North American manufacturers can be thankful for.


See this and other newsletter articles at http://amt-mep.org/files/9413/9273/1871/2014-02.pdf

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