UpFront: It Was a Very Good Year
By Brian J. Hogan
Did you find time during the holidays to think about 2006? Almost everyone I've met these last few months says 2006 was a simply excellent year. Orders were up, profits were up, and the biggest problems some companies faced were finding useful people to hire and increasing production capacity. Those are not the worst problems one can have!
These last two years have seen an impressive turnaround from a recession that was exceptionally severe in manufacturing. A few years ago, with bankruptcies and layoffs in all directions, manufacturing at every level absorbed a horrific beating. Worst of all, idiotic commentators kept insisting that it didn't matter, because in this post-industrial economy, everything was going to be manufactured in China anyway, so why worry?
Things are better now. Manufacturing in North America has demonstrated productivity and staying power. On the other hand, manufacturing certainly needs more than a couple of good years to stabilize and prosper. If the present level of business can be sustained for three or four more years, we can think of manufacturing as fully recovered from the very tough times we all lived through. But if 2007 sees business crater once again, all bets are off.
Still, the start of a New Year is a time for positive thinking, not gloom. Last year saw builders of manufacturing equipment like machine tools suddenly pushed to the limits of their production capacity. Everything they built was sold, like ice cream cones on a hot August day. Last November, for example, an executive at a well-known Japanese machine tool manufacturer told me the company had only one machine in stock in the US. And outfits that bought machine tools in 2006 were making parts and products and money.
Did you go to any trade shows in '06? At every one I attended, there was energy and excitement at a level not seen in a long time. What a reversal! During the recession, you could have shot deer in the aisles at some trade shows without endangering anyone (except the deer).
No one can say what's coming in 2007. But the world has a real treasure in the impressive and growing productivity of modern manufacturing operations that can make all the necessities (and luxuries) of life at ever-lower real prices. Have no doubt about it, 2006 was a very good year, one we'll remember and talk about during the long winter nights to come. And if the political life of this merry old world does not go completely off the tracks, the coming year may see the establishment of new records for the profitability and productivity of manufacturing firms everywhere.
This article was first published in the January 2007 edition of Manufacturing Engineering magazine.