In our last edition, we discussed the vibe in the manufacturing world immediately following the Presidential election in November. There was certainly a shift towards optimism in the manufacturing sector with the expectation that a commitment to domestic manufacturing was to be one of the primary policy focus points for the new administration. Fast forward 90 days and it certainly appears that this optimism has some staying power.
For those that are directly involved in manufacturing, I sense that we all share at some level, a belief that the policy decisions in the coming months and years will be made with an eye towards bolstering our domestic manufacturing sector. The logic seems irrefutable given the fact that manufacturing jobs have long proven to have a multiplier effect as to overall job creation. Only time will tell whether the promise of a commitment to domestic manufacturing will play out in a sustained manner as we hope it will. But as we look at some of the industry sectors in which our customers participate and support, we are encouraged by what we see.
For our friends that support the Oil & Gas sector, the Oil Rig Count is trending upward and showing signs of strength. While it is not realistic to predict a return to the 1,000 + level that was the norm between 2011 and 2015, the upward trend in that sector is promising. While we may not like the increased prices at the pump that come with strong oil demand, this industry does generate significant upstream demand for an array of manufactured products.
Automotive production is always seen as a general economic indicator and one to which the steel making industry pays particular attention. The demand forecast is trending in the 17 million unit rate for the foreseeable future, which is considered generally strong demand. With many models having more than one hundred electric motors designed into each vehicle, it is easy to see how this demand positively effects the electric motor manufacturing industry. When you consider the continuing and accelerating advances in vehicle design that rely more and more on electric motors for propulsion and control, the positive effect on demand in the electric motor market is certainly magnified.
A broader indicator for overall economic growth can be seen in the data for Residential Housing Starts. That trend remains positive with the recently released US Census Bureau data for March 2017 remaining above the 1.2 million unit mark. For perspective, conventional wisdom has held that any number more than 900k represents overall economic expansion. When you think in terms of the array of manufactured products ranging from raw materials to Transformers, Motors and Appliances in every new home, you can easily see how this indicator creates a positive effect in the manufacturing economy.
Finally, when we factor in various other macroeconomic forecasts to these indicators, we see a solid foundation on which to base our optimism for a strong manufacturing sector in the coming years. We have continued to invest in our business and in our relationships with our customers and suppliers to position ourselves to capitalize on the opportunities that come with a strong manufacturing outlook. Founded in 1947 and entering our 70th year in business, Sko-Die remains very proud to be your partner of choice and to be…