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What's propping up manufacturing?

It"s no secret that the U.S. economy is in the worst recession in decades and that manufacturers are suffering more than they have in recent memory. In its April Report on Business®, the Institute for Supply Management stated that the U.S. economy had been in decline for seven months and manufacturing had been contracting for 15 months. Probably no sector has been hurt more than automotive. According to Ward"s Automotive Group, 2009 light-vehicle production in North America year-to-date is half what it was in 2008.
A look at the long-term trends in industrial output, courtesy of the Federal Reserve Board, shows that the domestic automotive outputautos and parts, that ispeaked sometime in late 2005 and was in a gradual decline for two years before the bottom fell out in 2008. The domestic furniture industry experienced a similar pattern, although the decline wasn"t nearly as dramatic as it was in automotive.

Believe it or not, manufacturers that deal in goods described in NAICS code 335, electrical equipment and appliances, did pretty well until the middle of 2008, despite housing starts declining since 2006. That seems baffling, but this category includes industrial equipment, a segment that is 50 percent larger than the household appliance segment.

Over the long haul, machinery is another strong sector for the U.S. Our machinery output has fallen recently, of course, but it expanded from late 2003 until the middle of 2007.

The darling of U.S. manufacturing? It"s NAICS code 334, computer and electronic products, which grew 70 percent since 2002. At the bottom of this category are storage media—blank audio- and videotape—and audio and video recording equipment. Next up is communications (telephone, broadcasting, and wireless communications equipment) and computers and peripherals. Further up the ladder is instrumentation for navigational, measurement, medical, and control applications. The biggest chunk, however, is semiconductors.

Does this mean that the metals industry is left in the dust? Not necessarily. In fact, this sounds like good news for any company that makes products used in clean rooms, such as stainless steel tubing.
About the Author
FMA Communications Inc.

Eric Lundin

2135 Point Blvd

Elgin, IL 60123

815-227-8262

Eric Lundin worked on The Tube & Pipe Journal from 2000 to 2022.