Manufacturers: A New Year, A New Decade, A Renewed Optimism?

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Posted by: briansittley Comments: 0 0 Post Date: January 6, 2010

Mea culpa.  I’ve been a bad blogger, which is to say, I haven’t.  Blogged, that is.  Holidays, and year-end and all.  To fix that, this and the following entry will look at What Lies Ahead.  Perhaps.

 Some say we’re entering the period of The New Normal.  It’s all about lower expectations, tighter credit, slower growth and the like.  They’re probably right.  But then, you get something like the recent unexpectedly strong report on manufacturing that bolsters the confidence of some, and signals likely continued production expansion in the months ahead. 

The Institute for Supply Management (purchasing execs) saw its manufacturing index jump by about ten percent in December.  That’s a measure of confidence in growth, and it’s the fifth straight month of increases.  Its index of “new orders” also rose by about ten percent, to its highest level in five years. 

Meanwhile, China’s manufacturing sector expanded at its fastest rate in nearly two years, as did Europe’s.  Such signs point to what one economist calls “a global recovery in manufacturing more pronounced than the economic recovery as a whole.”

Inventories meanwhile are still declining to their lowest levels in a dozen years.  That usually leads to more new production – i.e., manufacturing growth gains, which in turn could lead to increased hiring in manufacturing.  While this week’s Labor Dept. report will likely indicate overall net job cuts in December (of modest proportions), some economists expect that employers will have added as many as 50,000 jobs, ending two years of net job losses.

Everyone has their own theories, beliefs and predictions.  But in the spirit of the optimism required of a new year and new decade, let’s say this: the news coming out these days is a heck of a lot better than that of a year ago.  Let’s start there.

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