October 2007 Edition

INDUSTRY NEWS

Hot Shot Entry Form Now Online

So you think your shop is hot stuff?

Now you can prove it. MAN is looking for shops that do it faster, better, or more high-tech than its competitors. If you think your shop fits the bill, go to MAN’s website, www.ModernApplicationsNews.com, and hit the logo to fill out an entry form telling us, in 250 words, why your company would qualify as a Hot Shot Job Shop.

We’ll pick a shop each month for a full-page profile in the magazine, on our website, and in our e-newsletter.

Readers will vote for their favorite shop and the winner will receive an award at IMTS and be featured on MAN’s cover in our IMTS issue.

Workholding Shipments Up from 2006 Levels

At $64.6 million for the second quarter 2007, shipments of workholding equipment for the U.S. were up 8.2 percent from the second quarter 2006 according to the Workholding Product Group – WPG – of the Association For Manufacturing Technology. Workholding equipment shipments within the U.S. by the 35 companies participating in the WPG statistical report totaled $56 million, while exports amounted to $8.6 million.

The report indicates second quarter 2007 U.S. domestic shipments and exports were both up from the second quarter 2006. Domestic workholding equipment increased 8.6 percent and U.S. exports increased 5.7 percent from year-earlier levels.

Of the domestic orders, the Midwest remained the largest destination with 39.6 percent of total domestic shipments going to that region. The change was negligible from the 40.5 percent reported in second quarter 2006.

The West, Central, South, and Northeast regions share of orders also closely mirrored their second quarter 2006 shares. Also, second quarter 2007 employment levels were up 9.2 percent from the same quarter in 2006.

The Workholding Product Group is comprised of AMT members who produce chucks, jaws, collets, vises, fixtures, and other workholding equipment. WPG’s goal is development of better ways to serve the workholding customer, and to implement programs to help the workholding community.

Fed Report Points to Accelerated Expansion

A Federal Reserve report shows industrial production rose 0.3 percent in July, the third increase in the past four months. Analysts see it as an indication of stable industry growth.

“Mirroring the gain of the prior month, it’s clear that the manufacturing expansion is accelerating,” David Huether, chief economist for the National Association of Manufacturers, said. “In fact, the growth in manufacturing production over the past two months has been the best performance in a year.”

The surge in manufacturing output was broad-based, with 13 of the 19 major manufacturing industries posting gains. Led by strong increases in motor vehicles, machinery, computers and electronics, and primary metals, durable manufacturing production rose 0.9 percent, marking the fastest growth in four months and the sixth consecutive monthly increase.

Nondurable manufacturing production rose 0.3 percent. This increase was mainly driven by solid growth in petroleum and coal products, as well as chemical production.

NAM Annual Labor Day Report Shows Housing Downturn Cushioned

The National Association of Manufacturers’ 10th annual Labor Day Report shows a snapshot of the past year’s economic trends in relation to the American workforce.

The 2007 report highlights how rising incomes are cushioning the impact of the housing downturn. David Huether, NAM’s chief economist and the report’s author, said the downturn is offset by export-led growth and strong business investment.

While employment growth has slowed over the past year, manufacturing employees’ real hourly compensation is rising and is now 30 percent higher than the average American worker.

These competitive salaries are mainly a result of the manufacturing industry transforming into a high-tech workplace that requires specialized and skilled workers. But, Huether’s study points to a lack of qualified workers as one of the most serious problems for manufacturers.

Dayton-Based Trade Show Opens Oct. 24

The third annual Advanced Manufacturing & Technology Show – AMTS – produced by the Dayton Tooling & Manufacturing Association will be held October 24 and 25 at the Dayton Airport Expo Center in Dayton, OH.

The show reaches concentrated manufacturing bases in the Ohio, Indiana, and Kentucky region, and offers the opportunities to assess trends, review new technology, and connect with the leaders and peers of industry.

The Conference Board Results Show a Mixed Economy

The monthly Conference Board Consumer Confidence Index, which had surged in July, gave back all of the gain in August. The Index now stands at 105 [1985=100], down from 111.9 in July. The Present Situation Index decreased to 130.3 from 138.3 in July. The Expectations Index declined to 88.2 from 94.4.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. According to a spokeswoman for the board, softening in business conditions and labor market conditions curbed consumers’ confidence. Volatility in financial markets and continued sub-prime housing woes may have played a role in dampening consumers’ spirits. But, despite less favorable conditions and in spite of all the recent turmoil, consumers still remain confident. Current index levels suggest further economic growth in the months ahead.

Consumers’ assessment of present-day conditions in August was less upbeat than in July. Those claiming conditions are Good decreased to 26.4 percent from 28.3 percent, while those saying conditions are Bad increased to 16.3 percent from 14.5 percent. Consumers were also less positive in their appraisal of the labor market. Those saying jobs are “hard to get” increased to 19.7 percent from 18.7 percent. Those claiming jobs are “plentiful” decreased to 27.5 percent from 30.0 percent in July.

Consumers were cautious in their short-term outlook. Those expecting business conditions to worsen in the next six months rose to 10.6 percent from 8.2 percent, while those anticipating business conditions to improve was virtually unchanged at 15 percent. The outlook for the labor market was also less favorable. The percent of consumers expecting more jobs in the months ahead declined to 13 percent from 13.8, while those anticipating fewer jobs increased to 15.3 percent from 14.9 percent. The proportion of consumers expecting their incomes to increase in the months ahead was virtually unchanged at 19.1 percent.

CEO confidence was also down in a related survey.

The Conference Board Measure of CEO Confidence, which had improved to 53 in the first quarter of 2007, fell to 45 in the second quarter. A reading of more than 50 points reflects more positive than negative responses. The survey includes about 100 business leaders in a wide range of industries.

Lynn Franco, director of The Conference Board Consumer Research Center, said several quarters of sluggish economic growth took a toll on CEO confidence, erasing two quarters of improvement.

She said CEOs do not expect a significant turnaround in conditions and profit expectations. Among chief executive officers who expect profits to increase, 46 percent believe technology will drive profits up, while 29 percent cite price increases as the main source of improvement. Only 17 percent foresee market/demand growth as a driver of growth and the remaining 8 percent cite cost reductions.

In an associated report, the Conference Board Help-Wanted Advertising Index dipped. This index is a key measure of job offerings in major newspapers across the U.S. The index dipped one point in July and stood at 25. It was 31 for the same period in 2006.

In the last three months, help-wanted advertising declined in all nine U.S. regions. Largest declines occurred in the following regions: West North Central, -17.4 percent; Mountain, -16.6 percent; and Pacific -16.3 percent.

The latest seasonally-adjusted results are in the table.

Delcam Posts Record Sales

Delcam, a company specializing in CAM products, announced the company had its best half-year sales in the first six months of 2007. Sales for the first half of 2007 were $29 million, up almost 10 percent from the $26.4 million reached in the first six months of 2006. Most of the increase in sales came from the addition of PartMaker and Crispin to Delcam.

The deterioration in the U.S. dollar exchange rate adversely affected profitability by approximately $700,000. Profit before tax for the first half of 2007 was $2.3 million, compared to $2.4 million last year.

The company increased spending on research and development from $7.4 million in the first half of 2006 to $8.2 million for the first six months of 2007.

Hexagon Acquires Israeli Laser Company

Hexagon AB, Stockholm, Sweden, entered into an agreement to acquire all outstanding shares of CogniTens Ltd., a 3D, noncontact, measurement technologies company.

CogniTens provides equipment for full-surface and features measurements using 3D optical technology. The company’s dimensional measurement solutions are used in engineering and in the shop floor environments of automotive and manufacturing industries.

CogniTens’ sales in 2007 are estimated to be approximately $8 million, and are expected to grow into double digits. CogniTens is headquartered in Israel, and employs about 50 people. The company’s main distribution and sales channels are in the U.S. and Japan.

Representatives of Hexagon, a manufacturer in the measurement and polymer markets, said they expect CogniTens will reach break-even during the second half of 2007 and contribute to Hexagon’s earnings during 2008.