Manufacturing Sectors that Grew in the Year Ending in April 2016

While manufacturing growth remains essentially level, certain sectors served by the precision machining industry grew nicely in the year ending in April 2016. Dr. Chad Moutray, chief economist at National Association of Manufacturers, has compiled and shared the data for the past year in manufacturing.

Fabricated Metal is the sector in which precision machining is classified, and this data shows a minus 3-percent growth for the period of April 2015 to April 2016. But our shops also provide engineered components for Motor Vehicles and Parts (up 4.3 percent), Miscellaneous durable goods (up 5.2 percent) and Computer and Electronic Products (up 2.9 percent).

While the actual year-over-year growth for manufacturing eked out a 0.5-percent growth rate, there were clearly winning and losing sectors, as the chart below shows.

Here is a recap of the markets typically served by our precision machining shops: Machinery, Fabricated Metal, Aerospace and Miscellaneous Transportation Equipment, and Electrical Equipment and Appliances were down, while Miscellaneous Durable Goods, Motor Vehicles and Parts, Computer and Electronic Products showed gains ranging from 2.9 to 5.2 percent.

According to Dr. Moutray, manufacturing rebounded somewhat in April, as manufacturing production grew 0.3 percent, just offsetting the 0.3 percent decline in March. In April, renewed strength in the Machinery sector (up 2.4 percent) and Motor Vehicles and Parts sectors (up 1.3 percent) were positive signs.

According to the Federal Reserve, April Industrial Production moved upward by 0.7 percent, after two months of decline.

The PMPA Business Trends Index of Sales for April 2016 declined from the year’s March high of 131 to April’s 122. That 122 reading is up one point from the 2015 calendar year average.

While the economic news is not bubbling with enthusiastic reports of growth, we think the fact that the industry is operating even or above last year’s average is a positive story. It beats the alternative.