Archive for March, 2009

U.S. manufacturing slides

Friday, March 6th, 2009

New orders, production, employment, and inventories are contracting while prices are falling.

The Institute of Supply Management reported its February numbers this week.

Norbert J. Ore, chair of the ISM Manufacturing Business Survey Committee said, “Manufacturing continues to decline at a rapid rate in February. While production has slowed its rate of decline, employment continues to fall precipitously. Prices continue to decline, but price advantages are not sufficient to overcome manufacturers’ apparent loss of demand. Survey respondents appear generally pessimistic about recovery in 2009. Some express hope that the stimulus package will help their industry.”

Some anecdotal responses:

  • “Customers across the board are being very cautious about ordering any stock.” (Transportation Equipment)
  • “Business is very slow, some of which is due to seasonality, and some is due to the state of the economy.” (Chemical Products)
  • “Asia previously was over 50% of our business and is now close to zero.” (Machinery)
  • “Still seeing frequent attempts at increases while everything is reacting to an economy that is retracting.” (Food, Beverage & Tobacco Products)
  • “Business slightly improved in February. May be the result of inventories finally coming into balance with lower demand.” (Paper Products)

MANUFACTURING AT A GLANCE
FEBRUARY 2009

Index

Series
Index
February

Series
Index
January

Percentage
Point
Change

Direction

Rate
of
Change


Trend*
(Months)

PMI

35.8

35.6

+0.2

Contracting

Slower

13

New Orders

33.1

33.2

-0.1

Contracting

Faster

15

Production

36.3

32.1

+4.2

Contracting

Slower

6

Employment

26.1

29.9

-3.8

Contracting

Faster

7

Supplier Deliveries

46.7

45.3

+1.4

Faster

Slower

5

Inventories

37.0

37.5

-0.5

Contracting

Faster

34

Customers’ Inventories

51.0

55.5

-4.5

Too High

Slower

7

Prices

29.0

29.0

0

Decreasing

Same

5

Backlog of Orders

31.0

29.5

+1.5

Contracting

Slower

10

Exports

37.5

37.5

0

Contracting

Same

5

Imports

32.0

36.5

-4.5

Contracting

Faster

13

OVERALL ECONOMY

Contracting

Slower

5

Manufacturing Sector

Contracting

Slower

13

*Number of months moving in current direction.

Manufacturing summit invokes change

Friday, March 6th, 2009

“The grand challenge [of engineering today] is primarily about human ingenuity and technology,” said Lincoln Pratson, associate professor of sedimentary geology at the Nicholas School for the Earth and the Environment at Duke University and one of the panel members on energy during this week’s National Academy of Engineering’s Grand Challenges Summit in Durham, N.C. “Engineers are well positioned to lead our energy revolution. But we’ll need leaders from all walks of life, business, government, law, and policy,” he said. “In the case of 21st Century energy, special opportunities exist for those who can communicate with those from other fields.”

Pratson’s idea was one of the main challenges leaders discussed throughout the two-day event, the result of a partnership between Duke University, Olin College, and University of Southern California, in which engineering experts, professors, and business professionals from across the country shared their views on how the industry will meet the 14 grand challenges engineers face for the future.

The challenges fall under four main groups—sustainability and the environment, the role of engineering in improving medicine and healthcare delivery, enhancing security by reducing human vulnerability from human-made and natural threats, and enhancing the human capability for joy.

The challenges themselves range from making solar energy economical, providing energy from fusion, developing carbon sequestration methods, and providing clean water across the world to advancing health informatics, better engineering medicines, and preventing chemical and biological warfare and nuclear terror. Other challenges include enhancing virtual reality, advancing personalized learning, and engineering the tools of scientific discovery.

The challenges did not stop at science and technology. Entrepreneurs shared their knowledge about how to sell these grand ideas to businesses and policy makers, reinforcing the notion that engineering is not just for hermetic techno-geeks, but an all-encompassing career choice for innovative, business-minded, creative thinkers who are excited to take on the challenge of changing the world they live in for the better.

“The aspiration of energy independence of any country is very lofty and almost impossible to achieve,” said Emil Jacobs, ExxonMobil’s vice president of research and development and one of the energy panel members. “The target we should have is energy security—the ability to have the energy you need to support economic development. … There’s not a silver bullet here. We’ll need every option available—coal, natural gas, oil, biofuel, nuclear, soil, and wind. Technology will be a key component. If we look at the mix between these, it’s hard to see what that will look like. You need to think about scale, cost, sustainability, and environmental footprint.”

“The term [energy independence] is my least favorite phrase,” said Robert Socolow, professor at the Princeton Environmental Institute at Princeton University. “It implies if we take care of ourselves it doesn’t matter what the rest of the world’s problems are. I can’t figure out why it has political appeal as a concept except there’s a side of us that wants to believe that. If we were import-free from oil, but the rest of the world were full of international relations that could go awry, do you think we’d be insulated from that? It’s too bad, it’s a political trough we all walked into from the 1970s, and we seem to not be able to climb out of it.”

Inciting engineers to be harbingers of technological innovation and scientific philanthropy were the beef stock of the summit, but definite aromas of educational metamorphosis drifted throughout the two days as engineering leaders trumpeted the notion that universities will need to be knowledge brokers as well as local and federal policy makes in industry to solve these vast problems.

“This is a time of great openness of change to our nation and the world,” said Duke University’s Dean of Engineering Tom Katsouleas during the summit’s opening remarks. “But the doorway to change will not remain open long. We need to put in place institutional changes to allow us to sustain efforts when openness to change has abated. University leaders will need to be engaged … committing themselves to research and work that fosters and rewards collaboration and teamwork across disciplines,” he said.

“They’ll need to be active thought leaders to inform the public of challenges and obstacles,” he said, which does not mean being just a researcher for faculty, but inspiring students. “We need to change the way we teach in the classroom, encouraging students to step outside their comfort zones and make them aware of how they impact the human condition.”

—Ellen Fussell Policastro