No stimulus for manufacturing

Buried within the Institute for Supply Management™'s July Manufacturing ISM Report on Business® is a telling quote from a metal fabricator.

"No stimulus for manufacturing."

Technically, the government has set aside a bit of money. On Thursday the Treasury Department revealed plans regarding a $2.3 billion manufacturing tax credit for investment in renewable-energy-related manufacturing. Another $3 billion is being poured into green energy projects such as solar and wind. This adds to other government stimulus efforts supporting the auto and "clean energy" sectors. And of course there's some indirect help through the government's cash-for-clunkers program.

That adds up to some serious dough for some, but I see the fabricator's point. This industry hasn't gotten the headlines or impassioned debate that the health care sector's enduring at the moment. Nor is it getting the kind of funds or scrutiny that the financial sector has. Sure, the auto industry has gotten some help, but not without some congressional finger-wagging and serious angst from U.S. taxpayers who don't want to own struggling car companies.

The reality is that most in manufacturing, particularly the small tier suppliers, haven't gotten much, if any, direct government help. But considering all the strings attached, is getting no help a bad thing? Wouldn't it be easier for the free market to do its job, for the best of the best to get stronger, and for the weaker firms to fall by the wayside? It seems that's what the recession is doing to at least some in the metal fabricating sector. It's brutal, but it's reality.

Last week I spoke to sources at two companies, one a large commercial kitchen OEM, the other a contract fabricator specializing in electronics enclosures–companies you"ll read about in an upcoming print edition of The FABRICATOR®. Neither is making headlines by taking advantage of any government funds. Instead, both had their financial houses in order so that they could do some serious investing. The larger OEM bought several million dollars" worth of automated sheet metal cutting and bending equipment. The contract fabrication company bought additional space and powder coating equipment to expand its services and diversify its customer base.

Though we're seeing some signs of an economic turnaround, no one is saying we're out of the woods yet, something sources told me they knew all too well. They admitted their new machinery isn't running full-out yet. Orders still are down.

But they won't always be down. I believe these two companies are among many others that will come out winners in this recession. They are pursuing opportunities when times are tough, and likely will emerge stronger because of it.