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Will metal fabricating activity continue to grow?
- By Dan Davis
- March 25, 2011
For instance, read John Carney's CNBC story "Have Consumers Gone on Strike?" In the story he makes the point: "What seems to be happening is that businesses have been ramping up their production and hiring in expectations of strong consumer demand. Consumers, however, have failed to provide that expected demand."
He and his Wall Street-watching brethren actually are surprised by this turn of events? Does he bother to read anything or watch any show that goes beyond simple stock market performance? How can he be surprised that consumers are sitting on their wallets?
I think a commenter on the article summed it up quite nicely: "Here's something the 'experts' might want to consider...
"If you don't have a job you can't 'consume.' When a 'consumer's' discretionary income is spent on sky-high energy and food cost, they cannot by 'stuff.' If you [fall] behind on your bills, a 'consumer' cannot buy more 'stuff.' Credit cards are max = cannot buy more 'stuff.' People like me have enough 'stuff' and simply do not trust or want to support Wall Street. I want to save my money."
I had the same thoughts last summer. The more important part of this whole discussion is that manufacturers are driving the economic recovery, as tepid as it is. Even with durable goods orders falling for February, I don't think that manufacturing growth is going to slow any time soon. I've talked to several shops, and they are as busy as they've been at any point over the last couple of years. For example, I visited Southern Fabricators Inc. in Polkton, N.C., in February, and Sales Manager Ken Carpenter Jr. told me that his company expects to grow revenues by 33 percent when compared to 2010. The electrical, HVAC, and industrial equipment markets it serves have rebounded strongly this year.
Why are metal fabricators rebounding when overall consumer spending is not? My co-worker Tim Heston put forth the theory that the metal fabricators are building metal parts that are much-needed, and as a result, they are working on orders. Those that supply Snuggie®s and Crocs® can't make the same claim.
Again, read the headlines. Food prices are up because demand has risen and supplies are down compared to previous years. That provides more funds for farmers who purchase equipment, distribution companies that require more trucks, and stores that need shelving to expand or remodel.
Look at the happenings in the Middle East. U.S. companies are ready and willing to invest in domestic energy again, and $4-per-gallon gas will only reinforce that trend. I honestly think that even the tragedy in Japan will only temporarily delay more investment in the domestic nuclear industry. Luckily, all of these industries—renewable or nonrenewable—need metal parts.
I can't stress it enough: Metal manufacturing is vital to the overall strength of the U.S. economy. The country literally needs it to be healthy. The "experts" can argue about how much of overall GDP domestic manufacturing should be, but given the fact that they can't figure out why consumers aren't spending money, I wouldn't wait for a profound answer.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
start your free subscriptionAbout the Author
Dan Davis
2135 Point Blvd.
Elgin, IL 60123
815-227-8281
Dan Davis is editor-in-chief of The Fabricator, the industry's most widely circulated metal fabricating magazine, and its sister publications, The Tube & Pipe Journal and The Welder. He has been with the publications since April 2002.
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