![]() |
||||||
|
|
||||||
|
|
||||||
|
|
||||||
|
|
||||||
Manufacturing Turbulence... Now What?If you're a manufacturing industry pundit, maybe you can help me make sense of the yoyo that is the monthly Purchasing Managers Index, the PMI, for short. I understand the metric well enough. I've been watching it for years while covering the electronics industry, and, like many others, I get a little jittery when the calendar flips to a new month. It's the bellwether of how well the manufacturing sector is faring. Still, though, I can't help but wonder: Is this the closest thing we have to a crystal ball, using previous months' activity to foreshadow what's likely to come in the next few months? Or is it one of the few ways we can make sense of the manufacturing and economic climate via numbers that show some predetermined level of growth or contraction? More broadly, what I never quite understood is how purchasers or supply chain managers change or adjust their existing sourcing or purchasing plans when these numbers come out. And do constantly fluctuating growth/contraction cycles influence manufacturing investment strategies? For example, if the PMI registers growth for five months, is that a sign for manufacturers to run more factory lines? Or do a few months of contraction signal time to give temporary workers pink slips? Take November's mixed bag of global PMI results. How do we make heads or tails of this? The Institute for Supply Management reported this week that "economic activity in the manufacturing sector contracted in November, following two months of modest expansion." The organization said last month's numbers indicated contraction in manufacturing for the fourth time in the last six months, and The Wall Street Journal said the 49.5 percent for November is the PMI's lowest level in three years. But if 50 percent is the manufacturing economy's break-even line, should we be too nervous when it contracts a half-percentage point? It's not as if it dropped to 35 percent, as the global PMI did in the middle of 2008 when the financial crisis forced a hard and fast brake on production. (You can find historical global manufacturing PMI info here.) Of course, this is filtered through the more positive news that the overall US "economy grew for the 42nd consecutive month," according to the ISM. The New Orders Index came in at 50.3 percent, a decrease from October but also indicating growth in new orders for the third consecutive month, the report said. The Production Index was up as well to 53.7 percent, a good sign for two consecutive months. Worldwide, the JPMorgan Global Manufacturing PMI -- a composite index produced by JPMorgan and Markit in association with ISM and IFPSM -- rose to a five-month high, hitting 49.7, just "marginally below the neutral 50.0 mark." The much-watched China PMI increased for the first time in four months, and Brazil, India, Indonesia, Mexico, Russia, Switzerland, Turkey, the UK, and Vietnam saw expansion as well. As expected, the Eurozone and Japan had downturns. Unlike in the US, global manufacturing new orders "contracted for the sixth successive month in November, although the rate of decline was only slight and the joint-slowest during that period. This reflected ongoing weakness in many domestic markets and a further reduction in international trade flows," according to the JP Morgan report. Whenever I read these reports, I always feel the industry is bumping around in the middle between near-disaster and elated-growth. But, I'm curious. What do you make of November's mixed bag of numbers? What international PMI numbers do you look at more closely or plan against? How much do these PMIs impact your day-to-day decision-making or affect your near-term spending? |
More Blogs from Logical Link
An analyst’s bearish forecast for the iPhone sends shivers through the global supply chain.
After reducing risk by spreading out its operations, Boeing shakes up its engineering department to improve profitability.
As smartphone OSs become a key enabler, a shift from hardware design to software development will put different pressures on the supply chain.
Natural disasters wreak havoc to the tune of $100 billion in annual damages, says a UN report. To cope, companies need improved risk management strategies.
Americans, many of whom cannot name a Chinese brand, say they wouldn't knowingly buy Chinese products.
Webinars
Upcoming Webinars
Date: 7/9/2013 11:00 a.m. eastern
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
Archived Webinars
Date: 4/30/2013
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
EBN Newswire
PHOENIX 1/16/2013
Avnet Embedded Opens Development Labs SAN FRANCISCO 1/8/2013
Vallee Appointed to Reserve Bank Board PHOENIX 12/13/2012
Avnet to Acquire Assets of USI Electronics PHOENIX 12/12/2012
Avnet EMA Adds Digi International SAN FRANCISCO 11/29/2012
UBM Tech Launches Partbuyer.com for Electronic Procurement PHOENIX 11/19/2012
Avnet Expert to Present at CSCO Summit 10/24/2012
Is Your Supply Chain Static or Dynamic? PHOENIX 10/22/2012
Avnet EM Holds SpeedWay Design Workshops PHOENIX 10/16/2012
Avnet EMA Launches Technical Seminars PHOENIX 9/26/2012
Avnet Express Appoints Exec PHOENIX 9/19/2012
Avnet and Triad Team Up in Americas PHOENIX 9/12/2012
Avnet Recognized by InformationWeek Avnet Video Resources
Like Us on Facebook
|
|||||
|
|
||||||