Manufacturing Expanding But Needs Aggressive Business Development
Posted By Industrial Web Solutions Marketing Team on August 12, 2010
Market Research & Aggressive Business Development Strategies a Necessity in Current Economic Climate
The July 2010 Manufacturing ISM Report on Business indicates that economic activity expanded in manufacturing for the 12th consecutive month and that the overall economy grew for the 15th consecutive month.
Norbert J. Ore, CPSM, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee, stated, “Manufacturing continued to grow during July, but at a slightly slower rate than in June. Employment, supplier deliveries and inventories improved during the month and reduced the impact of a month-over-month deceleration in new orders and production. July marks 12 consecutive months of growth in manufacturing, and indications are that demand is still quite strong in 10 of 18 industries. The prices that manufacturers paid for their inputs were slightly higher but stable, with only a few items on the short supply list.”
Manufacturing growth registered a PMI at 55.5% (down 0.7% from June). Ore stated, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through July (58 percent) corresponds to a 5.4 percent increase in real gross domestic product (GDP). In addition, if the PMI for July (55.5 percent) is annualized, it corresponds to a 4.5 percent increase in real GDP annually.” Fabricated Metal Products reported that “business in July was strong, the best month since October 2008.” Machinery, on the other hand, said that the “slow economy has killed sales for new equipment orders.” This seems to indicate that companies are opting to repair or upgrade machinery as opposed to invest in new. Four industries reported contraction in July: Nonmetallic Mineral Products; Furniture & Related Products; Food, Beverage & Tobacco Products; and Machinery. Still the overall outlook remains positive with ten manufacturing industries reporting growth in July: Plastics & Rubber Products; Miscellaneous Manufacturing; Paper Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Primary Metals; Textile Mills; Computer & Electronic Products; Fabricated Metal Products; and Chemical Products.
For the 13th consecutive month The New Orders Index indicates growth; however, at 53.5% it registered lower than the previous month by 5%. Quarterly figures indicate that the New Orders Index is continuing to decrease, as Ore stated in his July remarks, and is down just over 12% from April of this year. As a result, the Production Index is also down in July by 4.4% from June’s reading, and down almost 10% from April’s reading. Good news for workers as the Employment Index registered 0.8% higher for July than June, with an overall increase of 0.1% since April. Prices seem to have stabilized, with only a slight 0.5% increase in the Prices Index in July, and a welcomed 20.5% decrease since April.
Manufacturers are challenged to develop creative and aggressive strategies to generate new orders and new business. Maintaining a strong understanding of the needs and processes of potential and existing customers is key to the development of marketing products and services that fulfill current requirements. What kind of outsourcing programs can you offer? Given your current set-up, what new markets can you explore? What kind of investment would it take to open up new markets? What market research have you conducted to uncover new markets or new business opportunities?
With the right kind of market research, your marketing strategies can be effectively developed and executed according to an intelligently planned schedule that will keep your business strong and growing. Now is a good time to work with a professional marketing consultant who can bring new ideas to the table and liberate you from your usual ways of doing things, which worked brilliantly in the past but may be hurting you at present. In the current economic environment of recovery, new business development is a principle component. It’s no longer “business as usual.” And waiting for “things to return to normal” is dangerously optimistic. Offering the right products and services to the right customers at the right time is more important now than ever during this process of recovery and reshaping of the economy. If you are interested in exploring business development opportunities call (800) 399-9859.
That is assuming that people keep spending but they aren’t. So these businesses, which restocked in anticipation of a recovery were duped like the rest of us. The consumer is dead. That archive I put here with my name shows that things are not likely to get better unless there is a change to help mainstreet.
I hear what you are saying, Gary. It is definitely a complex problem that I don’t wish to over-simply. Consumers are no longer spending as they did a decade ago, that is true. Electronics and computer products are doing alright. The point I am trying to make is to spend the time to understand your market as it is today. Maybe there will not be a recovery as we have come to expect. Perhaps it is more a matter of reshaping than recovery. Instead of waiting for consumers (or whatever your market is) to buy what you want to sell them, take the time to uncover what they are willing to buy. This is where innovative thinking comes into play.