China, that powerhouse economy, has thrown the world a curve-ball. Some saw this coming, as the financial news from the country had turned neutral and then negative in the past few weeks. But like many Pollyannas, reality in the stock markets never set in and predictions of a government-led turnaround were common in manufacturing industry corporate reports to stockholders. The magic elixir of government stimulation, rapidly applied and instantly effective, was expected to turn this situation around. Weeks went by and this did not occur, at least in the short-run which had been the modus operandi since the recession.
Official figures released over the weekend showed only an 8.7% increase in production, the same rate as the country experienced in the recession three years ago. It wasn't as sharp decline as China's economy had been slipping over the last year or so, refusing to react to government moves to turn it around -- and distinctly sending a message of independence from the non-state-owned manufacturing community. Both imports and exports took a hit with the former down 2.6% and the latter growing only a so-so 2.7%. With domestic demand slipping in China, this prolonged situation is not good news especially in countries and companies for whom exports to China may be their life-blood in a near-recession economy.
Among the industrial laser and systems suppliers, this is troubling news. The end of the third quarter is only three weeks away and the anticipated recovery to stronger shipments to the Far East looks questionable. Some analysts see the government's infrastructure stimulus favoring imports in the coming months but there seems to be little support for an instant boom in the economy. That said, it looks like the industry will settle down to modest growth market in China into the new year.
Monday, September 10, 2012
Thursday, August 16, 2012
Technology to the rescue
I have been trumpeting the resurgence of US manufacturing, and the contribution of industrial lasers to it, since the recession began its recovery. The latest supporting data: July saw a second straight month of higher factory output (0.5%), according to the Federal Reserve, and overall industrial production increased 0.6%, a fourth straight month of growth. And although US manufacturing technology orders inched down in June 2012, according to the Association For Manufacturing Technology (AMT, as backlogs swell in the supply chain, order activity is expected to rejuvenate by summer's end.
Articles are now appearing in all the industrial-related publications, supporting the growth of US manufacturing as the rest of the world has gone into a manufacturing slump. Every once in a while I come across a succinct look at the US manufacturing sector from an observer. Mike Collins, president of MPC Management and the author of Saving American Manufacturing, has nailed it in his latest contribution. I highly recommend it.
Thank you Mike, for reminding us that the US is still a technology leader.
Articles are now appearing in all the industrial-related publications, supporting the growth of US manufacturing as the rest of the world has gone into a manufacturing slump. Every once in a while I come across a succinct look at the US manufacturing sector from an observer. Mike Collins, president of MPC Management and the author of Saving American Manufacturing, has nailed it in his latest contribution. I highly recommend it.
Thank you Mike, for reminding us that the US is still a technology leader.
Thursday, August 9, 2012
Making your mark in the world
I've been looking at the quarterly reports, and transcripts of telephone analyst interviews, of several industrial laser industry leaders, and I have also been keeping an unofficial tab on Google postings, and it is clear to me that laser marking is experiencing a strong year akin to pre-recession double digit growth levels.
Laser marking systems are the closest thing the industrial laser industry has to a consumer product. I liken it to a laser printer in the office products business, or a pick-and-place robot in the manufacturing sector. The term "ubiquitous" is apt because there are at least 155 companies in the Industrial Laser Solutions database of global laser marking system suppliers, with more showing up each week.
For those of you who haven't been paying attention to this application, let me explain why it has arrived at its current stature. Simply put, it's because of industry standards and government regulations for product marking and identification for traceability and security purposes.
Years ago, pioneers in the laser industry used to bemoan the fact that the laser was not like a razor, where the aftersales market for the consumable razor blades was where the profits were made. Lo and behold, the consumables issue worked in reverse for the laser companies. Users' issues with consumables when using ink-jet labeling created an interest in the non-consumable laser marking technology. This, along with other technical advantages -- legibility, permeability, readability, and process flexibility -- built the market for laser marking systems. So when corporations, trade associations, and governments looked for a marking technology with these attributes, they settled on the laser. This created a market built on regulations, which carried the industry through the recession in better shape than other laser technologies. This is all neatly spelled out in the now available Industrial Laser Solutions Laser Marking Digest.
By the end of this year, more than 36,000 laser marking/engraving systems worth between three-quarter and one billion dollars will have been installed globally. This will be at least a 10% growth over a good 2011 sales year. And the next time you see one of those 2D bar codes on a package, consider that precise laser marking allows the users to pack more marketing data in this identifier than other processes, assuring continuing growth in this industrial laser sector.
Laser marking systems are the closest thing the industrial laser industry has to a consumer product. I liken it to a laser printer in the office products business, or a pick-and-place robot in the manufacturing sector. The term "ubiquitous" is apt because there are at least 155 companies in the Industrial Laser Solutions database of global laser marking system suppliers, with more showing up each week.
For those of you who haven't been paying attention to this application, let me explain why it has arrived at its current stature. Simply put, it's because of industry standards and government regulations for product marking and identification for traceability and security purposes.
Years ago, pioneers in the laser industry used to bemoan the fact that the laser was not like a razor, where the aftersales market for the consumable razor blades was where the profits were made. Lo and behold, the consumables issue worked in reverse for the laser companies. Users' issues with consumables when using ink-jet labeling created an interest in the non-consumable laser marking technology. This, along with other technical advantages -- legibility, permeability, readability, and process flexibility -- built the market for laser marking systems. So when corporations, trade associations, and governments looked for a marking technology with these attributes, they settled on the laser. This created a market built on regulations, which carried the industry through the recession in better shape than other laser technologies. This is all neatly spelled out in the now available Industrial Laser Solutions Laser Marking Digest.
By the end of this year, more than 36,000 laser marking/engraving systems worth between three-quarter and one billion dollars will have been installed globally. This will be at least a 10% growth over a good 2011 sales year. And the next time you see one of those 2D bar codes on a package, consider that precise laser marking allows the users to pack more marketing data in this identifier than other processes, assuring continuing growth in this industrial laser sector.
Friday, July 13, 2012
Curiouser and curiouser: Unearthing a gem from ILS' readership data
A good editor looks for trends in the markets they report on. Searching for some clues as to shifts in the industrial laser markets, I have been reviewing the geographic breakdown of Industrial Laser Solutions' international readers, which comprise almost half the total readership. And I found a gem: among the African readers of ILS (we have subscribers in 32 of the continent's 52 countries), 31% are located in Nigeria, making this nation the heaviest reader of ILS. I would have thought this distinction belonged to South Africa which has an acknowledged manufacturing economy, but it is home to only 18% of ILS' African readership -- and it isn't even second, with that honor going to Egypt at 21%.
So I looked back at data from five years ago, and found the African splits were in the same order, but back then Africa only accounted for 0.7% of ILS's readers versus today's 2.7%. Is there something going on in the industrial laser community in that continent that caused a greater than 300% increase in those interested in industrial lasers?
Nigeria is one-third larger than Texas and it is the most populous country in Africa. Industrially it generates revenues from crude oil, coal, tin, palm oil, cotton, footwear, chemicals, fertilizer, ceramics, steel, and small commercial ship construction and repair. Petroleum and petroleum products, cocoa, and rubber are its major exports.
Among our Nigerian readers, 65% identify themselves as CEOs, directors, engineering and production managers, and engineers in companies that seem to be heavily slanted to the petroleum industry and its service companies. That sector is a potential choice market for laser applications such as welding, laser additive manufacturing, and drilling. Without Googling all the readers' companies (which might be fun but time-consuming), it's hard to find an obvious reason why ILS and industrial laser technology seem to be of such interest in Africa's largest nation.
Last year in a My View column on the manufacturing economy, I made a prediction about Africa's place as a factor in the industrial market and when it could happen. It was written as tongue-in-cheek and meant to be a think piece, yet it drew a surprising amount of supportive comments. Others, it seems, are also of the opinion that Africa will be a "hot industrial laser market." Maybe my 25-year horizon was a bit off, as evidenced by this publication's readership growth.
Update 7/17/2012: And apparently I'm not the only one who is turning my attention to Africa as a high-growth region -- the latest issue of Fortune has hit my desk with a special advertising section, "Africa's Moment" [PDF download here], discussing Africa's emergence "as a strong global player" for private sector and economic development activities.
So I looked back at data from five years ago, and found the African splits were in the same order, but back then Africa only accounted for 0.7% of ILS's readers versus today's 2.7%. Is there something going on in the industrial laser community in that continent that caused a greater than 300% increase in those interested in industrial lasers?
Nigeria is one-third larger than Texas and it is the most populous country in Africa. Industrially it generates revenues from crude oil, coal, tin, palm oil, cotton, footwear, chemicals, fertilizer, ceramics, steel, and small commercial ship construction and repair. Petroleum and petroleum products, cocoa, and rubber are its major exports.
Among our Nigerian readers, 65% identify themselves as CEOs, directors, engineering and production managers, and engineers in companies that seem to be heavily slanted to the petroleum industry and its service companies. That sector is a potential choice market for laser applications such as welding, laser additive manufacturing, and drilling. Without Googling all the readers' companies (which might be fun but time-consuming), it's hard to find an obvious reason why ILS and industrial laser technology seem to be of such interest in Africa's largest nation.
Last year in a My View column on the manufacturing economy, I made a prediction about Africa's place as a factor in the industrial market and when it could happen. It was written as tongue-in-cheek and meant to be a think piece, yet it drew a surprising amount of supportive comments. Others, it seems, are also of the opinion that Africa will be a "hot industrial laser market." Maybe my 25-year horizon was a bit off, as evidenced by this publication's readership growth.
Update 7/17/2012: And apparently I'm not the only one who is turning my attention to Africa as a high-growth region -- the latest issue of Fortune has hit my desk with a special advertising section, "Africa's Moment" [PDF download here], discussing Africa's emergence "as a strong global player" for private sector and economic development activities.
Tuesday, July 3, 2012
Why I hate mid-week holidays
I am just as patriotic as the next guy, I guess, respectfully honoring Independence Day on the 4th of July -- but not when it occurs in the middle of the week. My complaint here is that I experience two "Mondays" in one week, and that's not a good thing. Meanwhile, the rest of the world is working and my international e-mails keep streaming in, waiting for answers while I lounge in the hammock.
To top off this year's July event, the business news is not good. While trying to fathom what impact a reported slowdown in Latin America, Brazil and Argentina will have on industrial laser exports, I was hit by a new Wall Street Journal headline: "Factory Slump Reaches US." In this case, the former feeds the latter. Not a pleasant way to celebrate the 4th.
The Manufacturers Alliance for Productivity and Innovation (MAPI) has revised its Latin America forecast for overall manufacturing output in 2012 down to 3.1% from 4.4%. According to MAPI, manufacturing activity in Brazil stopped a year ago and has been contracting for the past six months. Brazil has been identified as a major market for industrial laser products -- as recently as last month, at a VDMA briefing in Stuttgart, Brazil was identified as prime territory for industrial laser expansion.
In fairness, the MAPI report was very positive on Mexico, which, led by automotive and machinery, is proving resilient to the downward trend in Latin America.
The effects of global economic slowdown have finally filtered down to the US manufacturing sector, where the Institute for Supply Management says exports fell and new orders dropped for the first time since July 2009. Many experts had anticipated this, thinking it was an inevitable action as Europe, a major trading partner, can't seem to get its act together and the stop-gap action by China's government to get that countries economy moving again seems to have had little effect.
As I rock in my hammock, a thought occurs to me. The USA fought for its independence on this day we celebrate -- but some 230 years later our independence is questionable, as a global economy and its effects make us interdependent on the actions of others.
To top off this year's July event, the business news is not good. While trying to fathom what impact a reported slowdown in Latin America, Brazil and Argentina will have on industrial laser exports, I was hit by a new Wall Street Journal headline: "Factory Slump Reaches US." In this case, the former feeds the latter. Not a pleasant way to celebrate the 4th.
The Manufacturers Alliance for Productivity and Innovation (MAPI) has revised its Latin America forecast for overall manufacturing output in 2012 down to 3.1% from 4.4%. According to MAPI, manufacturing activity in Brazil stopped a year ago and has been contracting for the past six months. Brazil has been identified as a major market for industrial laser products -- as recently as last month, at a VDMA briefing in Stuttgart, Brazil was identified as prime territory for industrial laser expansion.
In fairness, the MAPI report was very positive on Mexico, which, led by automotive and machinery, is proving resilient to the downward trend in Latin America.
The effects of global economic slowdown have finally filtered down to the US manufacturing sector, where the Institute for Supply Management says exports fell and new orders dropped for the first time since July 2009. Many experts had anticipated this, thinking it was an inevitable action as Europe, a major trading partner, can't seem to get its act together and the stop-gap action by China's government to get that countries economy moving again seems to have had little effect.
As I rock in my hammock, a thought occurs to me. The USA fought for its independence on this day we celebrate -- but some 230 years later our independence is questionable, as a global economy and its effects make us interdependent on the actions of others.
Thursday, June 14, 2012
Lasys 2012: Confidence in Europe, questions about China
A heavy attendance on Wednesday (2500+) had show organizers confident that they can achieve their projected show total of 4500. More importantly, the savvy visitors are here to see the laser and system exhibitors of which there were about half the total. LASYS does not show sheet-metal cutters for political reasons; a competing show here gets them later in the year.
Fiber lasers, diodes, ultrafast-pulse, and disc lasers have been featured at this year's LASYS -- but the industry leader IPG Photonics choose not to show, a surprise to all. TRUMPF and Rofin have major exhibits, and Trumpf has been busy every day. Products attracting interest have been micromachining, marking, drilling, and surfacing; most of these are smallish systems suitable for the size of this show.
LASYS remains very much a German show, with the rare US, Italian, and French systems being displayed. Most of the attendees are from Germany, although the show management did not have demographics available as this is being written. I spoke with a few visitors from Central and Eastern Europe who were job-shop owners shopping for micromachining systems.
Arnold Mayer, a market analyst with Optech Consulting, pegs the total 2012 industrial laser systems market at $10 billion, with projected growth flat ± 5%. This includes excimers used in photolithography, which ILS does not include in our market analyses.
The underlying concern about the European economy surfaces whenever the industrial laser market is discussed. However, the exhibitors here at LASYS seem reconciled to this sorting itself out, and that the situation will change for the better next year. Trumpf, the 800-pound gorilla, claims it will show an increase for the year, but company managers could not be pinned down to a number.
In fact, I have heard more concern about China than about Europe. Mayer pegs China at $1B last year, but he too is concerned that things have slowed for lasers there, at least for the last quarter.
Fiber lasers, diodes, ultrafast-pulse, and disc lasers have been featured at this year's LASYS -- but the industry leader IPG Photonics choose not to show, a surprise to all. TRUMPF and Rofin have major exhibits, and Trumpf has been busy every day. Products attracting interest have been micromachining, marking, drilling, and surfacing; most of these are smallish systems suitable for the size of this show.
LASYS remains very much a German show, with the rare US, Italian, and French systems being displayed. Most of the attendees are from Germany, although the show management did not have demographics available as this is being written. I spoke with a few visitors from Central and Eastern Europe who were job-shop owners shopping for micromachining systems.
Arnold Mayer, a market analyst with Optech Consulting, pegs the total 2012 industrial laser systems market at $10 billion, with projected growth flat ± 5%. This includes excimers used in photolithography, which ILS does not include in our market analyses.
The underlying concern about the European economy surfaces whenever the industrial laser market is discussed. However, the exhibitors here at LASYS seem reconciled to this sorting itself out, and that the situation will change for the better next year. Trumpf, the 800-pound gorilla, claims it will show an increase for the year, but company managers could not be pinned down to a number.
In fact, I have heard more concern about China than about Europe. Mayer pegs China at $1B last year, but he too is concerned that things have slowed for lasers there, at least for the last quarter.
Wednesday, June 13, 2012
Live from LASYS 2012: Savvy crowds return
The second day of LASYS dawned gray, gloomy, and wet, but the anticipated crowds showed up once again, certifying that, in Germany at least, day two is the most heavily attended. The show's six aisles were full early, and through mid-day most exhibitors were busy meeting prospects. Add to this the extra attendance offered by large numbers of attendees at the Stuttgart Laser Technology Congress being held concurrently, and Wednesday should be a good day for exhibitors. Assuming that the attendance holds up, LASYS may make its target numbers by the end of Thursday.
Several new-to-LASYS exhibitors showing ultrafast pulse and/or fiber lasers or disc lasers drew the attention of show goers. Attendees conditioned to these lasers and the applications they process were drawn to the offerings of new suppliers. Counter to shows in the US where these products would be received as novel, potential users in Germany understand the processing advantages of these lasers as a given. This more knowledgeable customer base makes it easier for vendors to present the merits of a given laser system, rather than explain the processing advantages of a technology.
Several new-to-LASYS exhibitors showing ultrafast pulse and/or fiber lasers or disc lasers drew the attention of show goers. Attendees conditioned to these lasers and the applications they process were drawn to the offerings of new suppliers. Counter to shows in the US where these products would be received as novel, potential users in Germany understand the processing advantages of these lasers as a given. This more knowledgeable customer base makes it easier for vendors to present the merits of a given laser system, rather than explain the processing advantages of a technology.
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