We’re seeing what may be, the most significant growth in manufacturing since 2007. Some markets, particularly Military/Defense and Aerospace, seem to be outpacing others, but overall 2018 is proving to be a good year for manufacturers.
According to the Institute for Supply Management, manufacturers expect to add nearly 2% more jobs nationally during calendar 2018 with the industry showing 20 months of continuous growth through April 2018.
Growth by Industry
Government Budget for Military and Defense spending is up and that is fueling growth in the aerospace and engine manufacturing sectors. The Wall Street Journal reported on October 25, 2018 that defense outlays grew 6% in the fiscal year that ended Sept. 30. Government spending is expected to continue to fuel growth in this industry throughout 2019 and 2020.
Commercial Aerospace has seen a steady growth in air travel and freight transport for the past 8 years and is expected to see continued growth for the next 20 years. This is according to the Boeing Commercial Aerospace Outlook. Their report projects that deliveries of over 42,000 aircraft over the next 20 years will be needed to sustain the growing market and replace aging aircraft.
With increased spending in military/defense as well as air travel and air transport on the rise, new engine programs at all engine manufacturers are in a serious upswing and should continue to show sustained growth for years to come.
Although one would think medical device manufacturing would be up based on the growing economy and aging population, we’re not seeing it yet in our shops. Since we only provide tooling and gages we would see the most growth when they are ramping up production of new products, and there does not seem to be much of that right now.
According to IBISworld, revenues from the Medical device manufacturing are down 1.3% in the last 5 years. While they are expected to rise soon due to the aging population and greater demand for medical services, recent legislation changes regarding healthcare may have created uncertainty in the medical device market.
Earlier this year, we dedicated an entire post to this specific industry. It was a case study about an equipment manufacturer. See Sirois Tool Responds to the Growth of Machine Manufacturers. The post explains that growth in other Industries means more machines will be needed. And a positive economic outlook makes companies willing to spend on new machines.
With bearings used extensively in many of these growing industries most bearing manufacturers are also very busy. This was another industry we explored in an earlier post this year. See Bearings Industry Experiences Growth as Consumer Demand Increases. In that post, we explore the many uses of bearings and discuss our history in the industry.
With a couple exceptions, this industry is flat for now. This is after an uptick in business over the last few years. The uncertain political climate has a huge effect on this industry. We’ll all have to stay tuned to see what happens in the coming months.
Conclusion – Plan ahead to take full advantage of economic growth
With growth in so many industries at the same time it is important for customers to remember to plan ahead for their tooling and gage purchases and to lock in capacity at their Precision Parts suppliers.
Sirois Tool continues to add equipment capabilities and capacities, and even more importantly they continue to train all their employees, especially their apprentices and others new to the Industry. This enables them to keep up with their customer’s requirements for tooling, gages and precision machine parts and assemblies.
Forbes – Where U.S. Manufacturing Is Thriving In 2018
The Institute for Supply Management – October 1, 2018
Wall Street Journal – October 25, 2018
Title: A Big Reason U.S. Economy Is Accelerating: Government Spending
Subtitle: Faster government spending, particularly on military, accounted for nearly half of acceleration in economic growth since mid-2017
Boeing Commercial Aerospace Outlook