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UpFront: As 2012 Ends, Waiting to Exhale

 Sarah A. Webster

By Sarah A. Webster
Editor in Chief

North America continues to be the bright spot in global manufacturing. 

In the US, economic activity in the sector grew in October, for the second consecutive month following a summer slowdown, the nation’s supply executives reported in the latest Manufacturing ISM Report On Business.

While the Euro zone remains a crisis zone, worldwide manufacturing is otherwise improving. JPMorgan and Markit report that the global downturn moderated in October. They reported growth in the US, Mexico, Canada, Brazil, Denmark, India, Indonesia, Ireland, Russia, the Netherlands and Turkey. Data from China, where a recent slowdown had caused some concern, shows that manufacturing is also bouncing back.

I recently visited the Japan International Machine Tool Fair—JIMTOF 2012—and found the buzz rivaled my visit to IMTS in Chicago this September. (By the way, if you missed IMTS, be sure to check out our highlights of the show online at

Both events were shoulder-to-shoulder crowded and excited, despite the oft-discussed challenges of workforce shortages, Europe's economy and, in Japan, big losses among consumer electronics giants Sharp, Sony and Panasonic. At IMTS, registration topped 100,200, a 22% increase over 2010 and the largest show-to-show increase ever. At JIMTOF, attendance reached 128,674, growth of 12% from the prior show in 2010.

In another sign of global manufacturing growth, machine builder DMG/Mori Seiki, whose union is approaching its fourth anniversary, announced a major expansion of its production facilities. Aside from its new facility in Davis, California, which opened with much fanfare in early November, DMG/Mori said at JIMTOF that it plans to open new production factories in China (September 2013) and Russia (late 2013). It's part of a play to capture the growing global business, as well as to hedge against currency fluctuations by near-sourcing.

Despite the brightening mood, however, most manufacturers remain solidly cautious, with the bitter aftertaste of the Great Global Recession still on their tongues. In fact, I have talked to companies that don’t even have capacity to meet all their current orders in a timely fashion, but who continue to fret about getting future orders. The Q3 2012 Manufacturing Barometer, a survey conducted by PricewaterhouseCoopers LLP, bears out this anxiety. Details are available in this issue’s NewsDesk. The survey shows that 82% of manufacturers expect revenue growth in 2013—up from 75% last year. Yet only 29% are optimistic about the world economy.

When will it be time to exhale?


This article was first published in the December 2012 edition of Manufacturing Engineering magazine.  Click here for PDF

Published Date : 12/1/2012

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