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Manufacturing industry rested, relaxed, and ready to roll

An economic slowdown in North America might not be so bad for the metal fabricating workforce

A chart shows an economic graph.

Many expect an economic slowdown to occur in the coming months. It might be beneficial for some in manufacturing to catch their collective breath and prepare for another extended run of business expansion. G0d4ather

If you work in a job shop, you probably keep an eye on macroeconomic news. After all, when you serve customers in various industrial segments, some customers are likely to be affected by major economic events.

With that in mind, you are probably a bit worried in the near term. Inflation appears to be sticking, with the Bureau of Labor Statistics reporting that the core rate of consumer inflation climbed to a yearly pace of 6.3% in August up from 5.9% in July, and the Federal Reserve is going to get aggressive with rate hikes to tame the inflationary trend. Some economic observers have suggested that the central bank’s short-term rate could reach as high as 4.75% in 2023.

People who were debating whether the U.S. was literally or metaphorically in an economic recession earlier in 2022 aren’t going to have to worry about having the same arguments in the coming months. The Fed is setting the groundwork for the recession to happen to tame inflation.

An economic slowdown might sound like a bad thing, but maybe it isn’t. The U.S. manufacturing economy has been expanding since June 2020, according to the Institute for Supply Management’s PMI. The August PMI was 52.8, which matched July and was the lowest reading since June 2020, but it still indicated that manufacturing was robust. (A score over 50 indicates expansion, while anything below 50 suggests an economic contraction.) Manufacturing companies have been working long and hard hours over the past couple of years to keep up with customer orders and to take advantage of new economic opportunities, as large, multinational companies have looked for domestic sourcing for fabricated goods because of unreliable overseas suppliers. Business has been so good that I’ve had more than a couple of industry veterans suggest to me that a mild slowdown “wouldn’t be the worst thing in the world.”

Kirk McCauley, president at American Engineering & Metalworking, North Canton, Ohio, isn’t pulling for a slowdown, but he is cognizant that his crew have been carrying a heavy load in recent months. Leading a discussion at Fabricators & Manufacturers Association headquarters during The FABRICATOR’s Technology Summit in mid-August, McCauley said workload for his staff is one of his top concerns, just behind trying to find skilled workers, which is a perennial worry for metal fabricators. (The Technology Summit provides metal fabricators a chance to visit a handful of manufacturers and job shops to see how they operate and the machine tool technology they employ. For more information on the event, visit www.fmamfg.org.)

“The economy shut down in 2020, but then rebounded in the following months. It’s like the volume was turned up to 50,” McCauley told the audience.

When you have difficulty finding new employees, you need to take care of the ones you have. That’s why McCauley said he is sure to avoid pushing his team too far.

“Let’s do the best we can,” he said. “Let’s get as many parts as we can out the door and call it an achievement.”

That’s a smart move because a distracted worker on the shop floor can create headaches and, in the worst case, injuries. Rework is a pain, but it’s also a fact of life that can be addressed with a little extra elbow grease. A forklift driver clipping a storage shelf and causing the shelving system to collapse is a very bad thing. No one reading this is storing hundreds of packages of toilet paper, so whatever comes flying off those shelves is going to be heavy and create a lot of damage—to both equipment and humans.

The ability to step away from work is a luxury that few in the metal fabricating industry have had in the past two years. A slowdown might provide that opportunity to step away, relax, and recharge.

That’ll be necessary because the long-term outlook for metal fabricating is good. Once the microchip supply chain is corrected, industries like automotive will be firing on all cylinders. There’s a very large generation of young people looking to move out on their own, and affordable housing is needed. A huge investment in U.S. infrastructure is coming.

There’s a lot to be excited about. Let’s get rested and ready for it.

About the Author
The Fabricator

Dan Davis

Editor-in-Chief

2135 Point Blvd.

Elgin, IL 60123

815-227-8281

Dan Davis is editor-in-chief of The Fabricator, the industry's most widely circulated metal fabricating magazine, and its sister publications, The Tube & Pipe Journal and The Welder. He has been with the publications since April 2002.