Business News: Data Shows Decent Sequential Manufacturing Growth

As reported: Jeff Berman, Group News Editor — Modern Materials Handling, 11/18/2009

Data released from Panjiva, an online search engine with detailed information on global suppliers and manufacturers, indicates that there was a 3% increase in the number of global manufacturers shipping to the U.S. market from August to September compared to a 1% increase during the same timeframe in 2008.

While this data does not portend a holiday-related impact on manufacturing data, it is an improvement over previous sequential data. Panjiva data indicated that from August to September the number of global manufacturers shipping to the U.S. fell by 5%, following a 1% dip from July to August.

From October 2008 to October 2009, the number of companies shipping to the U.S declined from roughly 147,000 to 139,000, a 5.4% annual decline. And from October 2007 to October 2008, the number of companies shipping to the U.S declined from roughly 157,000 to 147,000, a 6.4% annual decline.

Panjiva also reported that there was a 2% increase in the number of U.S. companies receiving waterborne shipments from global manufacturers from September to October, following a 4% decline from August to September.

“We are certainly trending positive from September to October,” said Panjiva CEO Josh Green. “This continues to be the takeaway from these numbers, but we are still operating at a fairly low number of absolute activity.”

On a comparable level, the Institute of Supply Management’s manufacturing index-known as the PMI-has eclipsed 50 for the last three months, which indicates decent economic growth on a sequential basis.

Green explained that these similar numbers are moving on parallel and are modestly positive signs, rather than signs of a robust and rapid recovery.

“We will take these numbers for now, considering where we all were last year, which was seeing the economy head off a cliff,” said Green.

When talking with manufacturers and suppliers of late, Green said the general consensus he has received of late is one of general caution. There was a hope that 2009 holiday would provide a boost for the manufacturing world, he said, but realistically that is not showing up in the data, nor is it what companies are expecting either, added Green.

“People are being cautious and waiting for the recovery to gain steam,” he said. “Optimism is great but where the rubber meets the road is in how many companies are making orders. We are seeing orders being kept low, because companies don’t want to be burned with a build up of inventory.”