Things are not looking so good for the home team these last few days, and members of the Red Sox Nation are burning up the sports talk show phone lines as the boys of summer can't seem to get started this year, now showing a losing record. On the 100th anniversary of the Titanic sinking -- and that of Fenway Park, ironically -- the fans are lining the railings ready to abandon ship.
As I listen to callers, who must not be veteran Red Sox fans who have learned to take the good with the bad, I marvel at how quickly they seem to have thrown in the sponge, judging that this will be a losing season, after only a dozen games out of 162.
I'm sensing the same from some of the business media who comment on activity in the U.S. manufacturing sector. For some reason, some scribes seem to be obsessed with recession and downturns. One says the U.S. manufacturing sector is showing signs of vulnerability, citing those pesky housing numbers that seem to upset Wall Street every month. (I commented on this in my last blog.) Others see danger in Europe, trotting out the latest grim news from the International Monetary Fund. Specifically pointing to troubles in Spain, another quotes a banker in that country: "Many people think that austerity is going to make the economic situation worse."
A few pieces of negative information has these writers donning life jackets and climbing over the ship's rail. We are not sinking, guys -- its only three months into the year.
I will say this, however -- while there is cause for concern about the health of the manufacturing economy here in the U.S. and some sectors abroad, there is also a level of confidence among industrialists. Most have their houses in order, having played it close to the vest in terms of staffing-up as the recovery progresses and increasing their capital expenditure budgets. This caution, at that time read by some analysts as negative, is now paying off and these companies are poised to make it through 2012 in good shape, for what many think will be a return to global prosperity in 2013.
Here at ILS I decided on a conservative approach in the 2012 forecast, and took a little heat for a modest single-digit growth in system revenues. I'm tweaking that number by a couple of percent in the mid-year report I will present in a June 12th Webcast. Check www.industrial-lasers.com) for details on this.
Thursday, April 19, 2012
Tuesday, April 3, 2012
Manufacturing a spring recovery
Memo to economists: What part of the supply/demand principle don't you understand?
I just put down my morning paper after reading an Associated Press news item, "Factory output, hiring go up," in which the good news is tempered by a separate report on construction spending showing that building activity declined again, "disappointing economists." On the same page, directly below, was a New York Times story, "Investors eye tons of homes," describing the investment opportunity to be gained from the massive inventory of pre-owned homes.
Really, economists? You know (or should) that excess inventory unbalances the supply/demand curve. So why would anyone invest in building new homes until that inventory is worked down?
On a more pleasant note, that AP article and one in the Washington Post trumpet the growth and health of the U.S. manufacturing sector, now at 32 straight months of expansion. The Post says slowdowns in China and weakness in European manufacturing are drags on those and world economies. Meanwhile, the U.S. perks along with an ISM (Institute of Supply Management index) of 53.4 for March and employment reaching 56.1 on the ISM index. Any ISM score above 50 shows expansion.
Next month at the AKL 12 meeting in Aachen, Germany, I will present my view of the U.S. market for industrial laser processing systems. I'll show my audience that while the US is in third place among the industrial laser installation sectors, we are serving a half-dozen key industries that have shown resilience in and after the Great Recession, and which offer great opportunities for continuing success in the near term. I'll back up my position with data such as that quoted above.
So economists: Wake up, smell the spring flowers, and rejoice a little in this Easter season. U.S. manufacturers understand supply and demand, so watch what they do, not just the new housing industry.
I just put down my morning paper after reading an Associated Press news item, "Factory output, hiring go up," in which the good news is tempered by a separate report on construction spending showing that building activity declined again, "disappointing economists." On the same page, directly below, was a New York Times story, "Investors eye tons of homes," describing the investment opportunity to be gained from the massive inventory of pre-owned homes.
Really, economists? You know (or should) that excess inventory unbalances the supply/demand curve. So why would anyone invest in building new homes until that inventory is worked down?
On a more pleasant note, that AP article and one in the Washington Post trumpet the growth and health of the U.S. manufacturing sector, now at 32 straight months of expansion. The Post says slowdowns in China and weakness in European manufacturing are drags on those and world economies. Meanwhile, the U.S. perks along with an ISM (Institute of Supply Management index) of 53.4 for March and employment reaching 56.1 on the ISM index. Any ISM score above 50 shows expansion.
Next month at the AKL 12 meeting in Aachen, Germany, I will present my view of the U.S. market for industrial laser processing systems. I'll show my audience that while the US is in third place among the industrial laser installation sectors, we are serving a half-dozen key industries that have shown resilience in and after the Great Recession, and which offer great opportunities for continuing success in the near term. I'll back up my position with data such as that quoted above.
So economists: Wake up, smell the spring flowers, and rejoice a little in this Easter season. U.S. manufacturers understand supply and demand, so watch what they do, not just the new housing industry.
Monday, March 26, 2012
The winds of change
I’ve always been an admirer of FedEx Corporation, with my respect starting when I did a business school case study on the company when it was known as Federal Express. Over the years I have been attracted to the company’s ability to translate its business plans into success stories, so when the company announced http://online.wsj.com/article/SB10001424052702304636404577297191613373980.html?mod=WSJ_business_whatsNews that it will scale-back its global economic growth forecasts and to compensate, park some aircraft and reduce employment numbers, I pay attention.
That resource is not the only clue that I follow; I was also instructed to look at the sales of corrugated cardboard because much of what is manufactured ends up being shipped in a box. And my son, a railroad man, always counsels me to look at freight car loadings for a clue to tomorrow's economy.
Notice I use the word "clue". And that should give tell you: it’s just another piece of the puzzle that I move around as I try to assemble a picture of how the industrial laser business will fare as the year progresses. http://www.industrial-lasers.com/articles/print/volume-27/issue-1/features/2011-annual-economic-review-and-forecast.html
Right now I am more concerned about what looks like the beginning of cracks in the normally monolithic hierarchy of the Chinese government. The news out of China, traditionally well controlled by government spinmeisters, has been truly challenged by the pervasiveness of the Internet with its instant analysis and comments that are beyond even their control. With the Internet, we now hear about the debates over philosophical differences between conservative Maoists at the top and more liberal pro-capitalists. And this discourse, as they say, is good thing, as long as it is debate and not one-sided dialogue.
My sense is that a fundamental change in the Chinese government could happen, and the stock markets don’t like change. Thus, the news from China is being vetted carefully to sense the impact on the industrial laser market in that country. China is the world's largest market for these lasers, and international suppliers worked their way out of the global recession by trading on the Chinese government's stimulus of its manufacturing industries. I know my friends in Germany are keeping a weathereye out for any pending winds of change that might slow market growth because China is one of their largest export markets. And since Germany delivers a major share of the industrial laser revenues, I, too, have my finger up in the air to detect a change in the wind direction.
That resource is not the only clue that I follow; I was also instructed to look at the sales of corrugated cardboard because much of what is manufactured ends up being shipped in a box. And my son, a railroad man, always counsels me to look at freight car loadings for a clue to tomorrow's economy.
Notice I use the word "clue". And that should give tell you: it’s just another piece of the puzzle that I move around as I try to assemble a picture of how the industrial laser business will fare as the year progresses. http://www.industrial-lasers.com/articles/print/volume-27/issue-1/features/2011-annual-economic-review-and-forecast.html
Right now I am more concerned about what looks like the beginning of cracks in the normally monolithic hierarchy of the Chinese government. The news out of China, traditionally well controlled by government spinmeisters, has been truly challenged by the pervasiveness of the Internet with its instant analysis and comments that are beyond even their control. With the Internet, we now hear about the debates over philosophical differences between conservative Maoists at the top and more liberal pro-capitalists. And this discourse, as they say, is good thing, as long as it is debate and not one-sided dialogue.
My sense is that a fundamental change in the Chinese government could happen, and the stock markets don’t like change. Thus, the news from China is being vetted carefully to sense the impact on the industrial laser market in that country. China is the world's largest market for these lasers, and international suppliers worked their way out of the global recession by trading on the Chinese government's stimulus of its manufacturing industries. I know my friends in Germany are keeping a weathereye out for any pending winds of change that might slow market growth because China is one of their largest export markets. And since Germany delivers a major share of the industrial laser revenues, I, too, have my finger up in the air to detect a change in the wind direction.
Monday, February 13, 2012
First you say you do and then you say you don't
Forecasting may be the easy part, explaining why you got it wrong after publishing it is the
hard part. So I was pleased to read, in an article by Casselman and Izzo in the February 13th Wall Street Journal, that I wasn’t theonly one that guessed wrong on the 2011 economy. It seems that 52 economists WSJ surveyed weren’t great forecasters as they predicted the economy would move forward and things were looking good. Then, as they say, “all hell broke loose” followed by one in Thailand and the economy tanked in Europe and all bets on a good year were off. As the Journal says, “The results reflect the inherent uncertainty of economic prognostication.”
For my part I went the other way on the industrial laser economy and took a more conservative approach. The result, I missed the record year number and had to do a fast shuffle at the end of November to get a more reasonable number in print in the January issue of ILS.
The Association for Manufacturing Technology just reported their calendar 2011 numbers. December U.S. manufacturing technology orders were up 12.2% from November and up 12.7% when compared with the total of $461.48 million reported for December 2010. For the year 2011 was up 66.4% compared with 2010, making 2011 the strongest year in more than a decade and higher than forecasters predicted.
I had noted the strength in the U.S. manufacturing sector but frankly was reticent to report it, as were many other analysts. We were all waiting for the proverbial other shoe, a double dip recession, to drop, month after month, until it became a non-issue in the fourth quarter.
Now I am reconsidering my forecast for 2012, especially since the WSJ economists are predicting only a modestly fast growth in 2012. They got it wrong last year and who says they won’t this year. Their track record isn’t great.
Thursday, February 2, 2012
Good times in the city by the bay
Optimism with caution was the rule-of-the-day among the dozens of exhibitors we interviewed at this year's Photonics West, held in San Francisco last week. This show has grown from an
intra-industry event to one of the world’s premier international photonics exhibitions now expanding into the field of industrial laser material processing equipment.
If it hadn’t been for the continuing mixed economic news from Europe, the gloom and doom of feature stories in the media, and the playoff loss of the local San Francisco 49’s professional football team, nobody would have had any complaints. And why not –about 20,000 visitors, presenters, and exhibitors helped to set an attendance record for show and conference. Almost 1200 exhibitors filled two halls at the Moscone Center, and from the opening bell, the aisles were full of enthusiastic lookers and
buyers.
Earlier in the week, at the Lasers & Photonics Marketplace Seminar, I had presented a glowing picture of the 2011 market and forecasts for a good but not great 2012. My remarks were corroborated by exhibitors who had attended the seminar with the general consensus being that a modest mid-single digit growth on 2012 coupled with the phenomenal 2011 growth wouldn't be all that bad.
If there was one drag among show-goers, it was the nagging news that suppliers were playing it close to the vest in terms of increasing employment and that Capex was being monitored
closely.
From the long dinner lines at area restaurants, it seemed that Photonics West was an economic boom for expense spending, and city officials might take note and lay out a more welcoming carpet for next year's event. You wouldn't even know we were in town, if talking to cab drivers is any indication. Or maybe the laid-back Silicon Valley residents are blasé when it comes to exciting technology shows and
conference
intra-industry event to one of the world’s premier international photonics exhibitions now expanding into the field of industrial laser material processing equipment.
If it hadn’t been for the continuing mixed economic news from Europe, the gloom and doom of feature stories in the media, and the playoff loss of the local San Francisco 49’s professional football team, nobody would have had any complaints. And why not –about 20,000 visitors, presenters, and exhibitors helped to set an attendance record for show and conference. Almost 1200 exhibitors filled two halls at the Moscone Center, and from the opening bell, the aisles were full of enthusiastic lookers and
buyers.
Earlier in the week, at the Lasers & Photonics Marketplace Seminar, I had presented a glowing picture of the 2011 market and forecasts for a good but not great 2012. My remarks were corroborated by exhibitors who had attended the seminar with the general consensus being that a modest mid-single digit growth on 2012 coupled with the phenomenal 2011 growth wouldn't be all that bad.
If there was one drag among show-goers, it was the nagging news that suppliers were playing it close to the vest in terms of increasing employment and that Capex was being monitored
closely.
From the long dinner lines at area restaurants, it seemed that Photonics West was an economic boom for expense spending, and city officials might take note and lay out a more welcoming carpet for next year's event. You wouldn't even know we were in town, if talking to cab drivers is any indication. Or maybe the laid-back Silicon Valley residents are blasé when it comes to exciting technology shows and
conference
Wednesday, January 11, 2012
Laser microprocessing — a bright future
Laser micromachining was recently defined in a magazine as being “for those who must think small," a good example of tautology (restatement in other words of an idea already stated). I’m often asked to define the term and rather than being tautological I usually say it's processing on a micron scale.
Semiconductor processing and applications in microelectronics fit this description nicely, but the sector on the border line is laser processing medical devices. Is laser welding of implantable devices, for example, pacemakers, a micro or macro application? At Industrial Laser Solutions, we classify this as micro.
As the makers of medical devices strive to miniaturize their high tolerance products such as catheters, thin-wall tubing, stents, and wire insulation — the use of ultra-short pulse laser technology for drilling, welding, and ablating on a micron scale boosted the acceptance of this laser as a means to achieve precision solutions to intricate applications in new materials ranging from memory alloys to polymers.
The "think small" concept certainly doesn’t apply to the market for ultra-short pulse lasers, which has been doubling each year for the past three years — ILS forecasts it will grow 95% in 2012 — and is likely to show more modest growth thereafter only because the base numbers have become substantial. One could get a little cute and say that the laser microprocessing market is "macro".
At Industrial Laser Solutions, we think the micro market, so dependent on the precise nature of the laser processes, has unlimited growth potential.
Semiconductor processing and applications in microelectronics fit this description nicely, but the sector on the border line is laser processing medical devices. Is laser welding of implantable devices, for example, pacemakers, a micro or macro application? At Industrial Laser Solutions, we classify this as micro.
As the makers of medical devices strive to miniaturize their high tolerance products such as catheters, thin-wall tubing, stents, and wire insulation — the use of ultra-short pulse laser technology for drilling, welding, and ablating on a micron scale boosted the acceptance of this laser as a means to achieve precision solutions to intricate applications in new materials ranging from memory alloys to polymers.
The "think small" concept certainly doesn’t apply to the market for ultra-short pulse lasers, which has been doubling each year for the past three years — ILS forecasts it will grow 95% in 2012 — and is likely to show more modest growth thereafter only because the base numbers have become substantial. One could get a little cute and say that the laser microprocessing market is "macro".
At Industrial Laser Solutions, we think the micro market, so dependent on the precise nature of the laser processes, has unlimited growth potential.
Thursday, January 5, 2012
Happy New Year, I think
When I reasoned why the manufacturing sectors served by industrial lasers were outperforming analysts' forecasts, I was slightly hesitant to talk about it. I had been stung before in 2008 when I came away from EuroBlech in October touting the optimistic forecast of the fabricating metals sector only to be rudely shocked into reality as that industry collapsed in December of that year as the great recession of 2009 took hold.
But today the industries that exhibit fertile ground for growth in industrial laser processing - energy, transportation, medical devices, fabricated metal products and aerospace - are now acknowledged by even the most jaded analysts as solid factors in positioning manufacturing as an economic leader in an otherwise down market. And by extension these industries are a strong contributor to the record 2011 growth of industrial laser revenues.
However, once stung - forever wary, and I reacted to the beginnings of some less than enthusiastic forecasts by showing caution in my 2012 market forecast, which those of you who are digital subscribers will read on January 15th and others will read online at www.industrial-lasers.com the next week.
But now, as this is being written, a raft of new information is appearing that suggests that manufacturing, at least in the US, is in for a more active period than anticipated. The Institute for Supply Management cued by a strong December growth in manufacturing suggests that the first half of 2012 should be very good for US manufacturing and in fact 11 of 18 US manufacturing industries will expand in the first 6 months of the year, including those that drove the 2011 market to new highs. Furthermore, 3 of our market drivers are forecast to expand for the entire year.
The Association for Manufacturing Technology and I were on the same track, and they cautiously forecast a positive outlook for 2012. IHI Global Insight was more positive, saying that a 2012 recession was unlikely.
Globally, the picture was not as clear and The Washington Post hedged on the US situation, as seen by surveyed economists, as possibly threatened by the situation in Europe, an issue that I factored into my forecast.
Right now, things look bright in the industrial laser sector at least for the first two quarters. Even problems in solar seemed to be easing as expansion in South America is set to grow this year. So sit back and enjoy 2012, at least the first half, and hope that it is strong enough to offset any potential decline later in the year.
But today the industries that exhibit fertile ground for growth in industrial laser processing - energy, transportation, medical devices, fabricated metal products and aerospace - are now acknowledged by even the most jaded analysts as solid factors in positioning manufacturing as an economic leader in an otherwise down market. And by extension these industries are a strong contributor to the record 2011 growth of industrial laser revenues.
However, once stung - forever wary, and I reacted to the beginnings of some less than enthusiastic forecasts by showing caution in my 2012 market forecast, which those of you who are digital subscribers will read on January 15th and others will read online at www.industrial-lasers.com the next week.
But now, as this is being written, a raft of new information is appearing that suggests that manufacturing, at least in the US, is in for a more active period than anticipated. The Institute for Supply Management cued by a strong December growth in manufacturing suggests that the first half of 2012 should be very good for US manufacturing and in fact 11 of 18 US manufacturing industries will expand in the first 6 months of the year, including those that drove the 2011 market to new highs. Furthermore, 3 of our market drivers are forecast to expand for the entire year.
The Association for Manufacturing Technology and I were on the same track, and they cautiously forecast a positive outlook for 2012. IHI Global Insight was more positive, saying that a 2012 recession was unlikely.
Globally, the picture was not as clear and The Washington Post hedged on the US situation, as seen by surveyed economists, as possibly threatened by the situation in Europe, an issue that I factored into my forecast.
Right now, things look bright in the industrial laser sector at least for the first two quarters. Even problems in solar seemed to be easing as expansion in South America is set to grow this year. So sit back and enjoy 2012, at least the first half, and hope that it is strong enough to offset any potential decline later in the year.
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