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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.
In our last edition, we posed the question “so what should be on our election wish list this time around?” We added a recommendation that we all start with advocating for policies that recognize and value the role that Manufacturing has had in the building and sustaining of our great nation. With the 2016 Presidential election having now been decided, we certainly have reason for optimism on the Manufacturing front for 2017 and beyond.
Looking at the trends in steel pricing for the 1st six months of 2016, it is hard to miss the direction and magnitude of the price increases that the market is seeing. The generally referenced pricing indices that many in the manufacturing sector follow have trended upwards in the arena of 60% since January 1. This observation is specific to the flat rolled sheet steel products that are the primary raw materials for the products that we provide to our valued customers. Looking specifically at the Cold Rolled CRU index, published pricing is now at its highest point since early 2012.
It’s hard to believe that 2016 is rushing past us and that we are on the cusp of 2017. What happened to that 2016 manufacturing recovery that many of the macroeconomic prognosticators envisioned? For those whose long term success is tied to a strong and sustained US Manufacturing economy, we feel as of late like the perpetually optimistic Chicago Cubs fan, being told "wait 'til next year". That "next year" may be now for the Cubs fans, but what about manufacturing?
Seems like back in 2014 the predictions were for a potentially weak 1st half and then a steady recovery in late 2014, continuing on into 2015 and 2016. Business owners were encouraged to expand and invest to put their manufacturing businesses in a favorable position to reap the rewards of a “manufacturing run” that would span several years. Then, in the 2nd half of 2014 began the steep decline on Oil Prices that seemed to change the calculus and to push those recovery predictions out into 2015 or 2016.
DECEMBER 2015 - Economic Indicators and the Manufacturing Economy………A vibrant domestic manufacturing sector is a key contributor to the economic engine of our country. At Sko-Die, we are firmly committed to the strength and expansion of our domestic manufacturing sector. For nearly 70 years, we have served an array of markets and customers that are all affected by the relative strength or weakness of several economic indicators. Though the major media outlets do make regular mention of our manufacturing economy, a vast majority of the discussion tends towards some of the specific subsets of our overall manufacturing sector, such as Housing Starts, Automobile production and Oil Pricing.