Monday, November 2, 2015

So “the Sky is Falling” on California Manufacturing(?!)

I always hate this when I read it.  Since I am in an industry that serves the manufacturing industry, I understand how important a strong manufacturing base really is.

I just wish others saw it this way, too.

Back then, they were lamenting that the Inland Empire PMI had dropped below 50 for the second month in a row (below 50 = contraction), hitting 44.1 in September, after having already hit 46.6 in August. But the sky wasn’t falling “yet,” the report pointed out, because, given how volatile the index is, “it takes three months of figures below 50 before a new trend (in this case a trend of contraction rather than growth) is established.”

Alas, on Monday, the IAR released the Inland Empire PMI for October, and it was sharply below 50 for the third month in a row, this time at 45.9.
So, when it hits zero, can we truly say the sky is falling?

The Manufacturing Base isn’t just about companies who manufacture things. The domino effect slams all the companies and people who service those manufacturers; suppliers of parts and equipment, engineering companies, maintenance contractors, inspectors. You name it. The “Falling Sky” penumbra extends far beyond just the manufacturer.

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