Production Machining

DEC 2018

Production Machining - Your access to the precision machining industrial buyer.

Issue link: https://pm.epubxp.com/i/1054178

Contents of this Issue

Navigation

Page 28 of 51

:: Of the thousands of products which have been affected in 2018 by tariffs, production machinists will find that their input costs for aluminum and metal barstock may be most susceptible to price rises in 2019. time, providing an abundance of such new technological options reduces the total number of units produced of any single product, leaving fewer units of production to cover the fixed costs of development and production. is explains the rising cost of automotive manufacturing, which has steadily accelerated since the beginning of 2017. Making the matter more challenging will be the number of new North American launches in 2019 (40) and 2020 (38). e result of all these factors in the coming year will put an emphasis on cost controls for manufacturers. Regulatory changes, consumer changes, more competi- tion among brands and their growing array of models will cause supply chains to find ways to further cut costs in order to find profitability without the benefit of higher volumes. For many manufacturers, this may mean that keeping a technological advantage over the competi- tion may be one of the best ways to stay competitive and profitable. Medical. e medical industry continues to be a bright spot in manufacturing as Gardner's latest financial review indicates on-going growth in revenues, earnings, free cash flow and capital expenditures. e latest results signaled a slight increase in the growth rate of capital expenditures. e most significant financial improvement in the industry was in earnings growth, which turned positive during the second quarter after contracting during the prior two quarters. Capital expenditures, which includes spending on manufacturing and equipment, grew from 2.8 percent in the 12-month period ending in the first quarter of 2018 compared with 3.7 percent at the end of the second quarter of 2018. is reverses the slowing growth trend in capital expenditures, which began after capital spending growth reached a peak of more than 17 percent in the first half of 2017. An analysis of quarterly data between the fourth quarter of 2014 and the second quarter of 2018 indicates a statistically significant relationship between revenue change during a given quarter and a subsequent change in capital expenditure change two quarters later. From this simple linear regression analysis—which considers no other factors—and assuming an accurate forecast of revenues based on a composite Wall Street forecast, this model predicts total capital spending growth of 11.3 percent during calendar year 2018 followed by slowing growth of 6.6 percent in 2019. Gardner's business index data of manufacturers supplying the medical industry is copacetic with Wall Street's near-term optimism. According to Gardner's survey data in the year-to-date period, medical industry manufacturers have experi- enced strong growth in new orders, production and more recently, supplier deliveries. Aerospace. The aerospace market is and will continue to be a bulwark of the manufacturing space over the coming years with annual growth in the aircraft market from 2018 through 2022 expected to be 5.8 percent. The largest growing The trends of Material Prices (3MMA) and Prices Received (3MMA) for RevDate time Month. Color shows details about Material Prices (3MMA) and Prices Received (3MMA). The data is filtered on Brandcode, GBI Table, Industry Code, Region Code and Sizecode. The Brandcode filter keeps PM. The GBI Table filter keeps PM_M3. The Industry Code filter keeps ALL INDUSTRIES. The Region Code filter keeps All Regions. The Sizecode filter keeps All Sizes. GBI: Precision Machining— Material Prices and Received (3-MMA) 90 85 80 75 70 65 60 55 50 45 40 35 1/12 1/13 1/14 1/15 1/16 1/17 1/18 1/19 n Material Prices (3MMA) n Prices Received (3MMA) productionmachining.com :: 27 SPECIAL REPORT

Articles in this issue

Links on this page

Archives of this issue

view archives of Production Machining - DEC 2018