US manufacturing received mixed marks at the halfway mark of the year. The manufacturing economy showed signs of acceleration, but the jobs weren’t reviving as much as production and orders.
The good news: The Institute for Supply Management said its PMI, which measures economic activity in manufacturing, was 53.2% in June, the best index reading in at least 12 months and an improvement from 51.3% in May. The PMI was bolstered as production and new orders continued to rise and employment grew after six months of job losses.
The report by ISM (Tempe, AZ) is based on a survey of purchasing and supply executives. A reading above 50% indicates expansion and below 50% contraction. Through June, the PMI enjoyed a four-month streak above 50%. That followed a five-month streak of economic contraction.
The June surge enabled the PMI to average 50.3% over 12 months, or barely in positive territory.
Of 18 industries, 13 reported economic growth in June, including textiles, petroleum and coal products, fabricated metal products, miscellaneous manufacturing, primary metals and machinery.
Three industries reported contraction: electrical equipment, transportation equipment and plastics and rubber products.
Falling oil prices have been a drag on manufacturing for the past year, as orders for energy exploration equipment faltered. The June report by the institute represents a rare bright spot. Meanwhile, until recently, transportation equipment has been a positive in the monthly institute reports. Respondents to the institute’s survey described transportation as still strong, but slowing.
The institute’s New Orders Index was 57% in June, up from 55.7% in May. ISM said 12 industries reported increases in new orders, including textiles, petroleum and coal products, fabricated metals, furniture and miscellaneous manufacturing. Five industries had decreases in new orders, including wood products, electrical equipment, primary metals and transportation equipment.
The group’s Production Index was 54.7%, rising from 52.6% in May. The institute said 12 industries reported output increases, including miscellaneous manufacturing, petroleum and coal products, fabricated metal products and primary metals. Three industries reported decreases in production, including transportation equipment and machinery.
Both the New Orders and Production indexes shown expansion for six consecutive months. ISM’s Employment Index was 50.4% in May, following six months in negative territory.
Separately, the US Bureau of Labor Statistics said manufacturing added 14,000 jobs in May. However, almost all of the net gain occurred in food products.
Non-durable goods added 11,000 jobs while makers of durable goods only added 3000, according to the bureau. Food products added 13,000 jobs, with almost all other categories of non-durable goods posting job losses. Durable goods only added 3000 jobs.
Manufacturing jobs totaled 12.296 million in June on a seasonally adjusted basis. That compares to 12.282 million in May. The June figure was lower than the 12.325 million for June 2015.
Within durable goods, job gainers included furniture (up 2800), electrical equipment and appliances (up 2700), miscellaneous manufacturing (up 1800) and machinery (up 900).
Durable goods categories posting job losses included computer and electronic products (down 2100), non-metallic mineral products (down 1800) and transportation equipment (down 1500). Within transportation, motorized vehicles and parts lost 100 jobs. Until recently, the auto industry had been a bright spot in manufacturing employment.
—Senior Editor Bill Koenig
Mazak Shifts Executives
Mazak Corp. (Florence, KY) said Brian Papke, long-time company president, has accepted a new position as chairman, and Daniel Janka, former executive vice president, has been named company president.
Janka on July 1 assumed the normal operating functions of Mazak’s North American operations, including Mazak’s iSmart Factory and North American headquarters in Kentucky along with the company’s eight Technology Centers located throughout North America.
Mazak said in a statement the appointments positioned the company “for continued future growth.” The machine tool maker said the new leadership “will continue the company’s forward momentum” and “further strengthen” Mazak’s position in “multitasking, five-axis and additive manufacturing technologies.”
Papke selected Janka, who joined Mazak in early 2016, as his successor. Mazak said Janka’s experience in the machine tool industry and his involvement with machine tool utilization software and five-axis technology at past positions meshes well with Mazak’s iSmart Factory and the company’s commitment to MTConnect as well as the total Mazak iSmart manufacturing concept.
Papke has been with Mazak since 1987 and had been company president since 1989. Under his leadership, the Kentucky plant grew from one building to its current five-building, 800,000-ft2 (74,322-m2) campus where the company now designs and builds advanced manufacturing systems.
Takumi USA Opens Indianapolis Showroom, Tech Center
Takumi opened its new technology center and showroom in Indianapolis to distributor partners to kick off the introduction of Takumi USA to the North American market.
“Takumi machining centers have been prevalent in Europe and Asia for 30 years,” said Joe Braun, vice president of marketing and product management for the Takumi brand. “However, the brand hadn’t been introduced to the North American market. To be successful, we knew we needed to open a local service and support center here in Indianapolis in addition to a showroom.”
The Takumi CNC machines are equipped with FANUC controls with three machine categories: the double column H-Series machines are high-speed, high-performance machines designed for the mold market and aerospace industry; the VC-Series includes high-precision CNC machining centers with fast rapids; and the V-Series are heavy-duty box way CNC machines.
DMDII Members Trying Out Digital Manufacturing Commons
A group of DMDII members, including 3D Systems, Caterpillar, General Electric, Georgia Tech, The Innovation Machine and Rolls-Royce, is beta testing an open-source digital marketplace called the “Digital Manufacturing Commons,” or DMC, Jim Barkley, director of the DMC at UI Labs in Chicago, said.
The US Department of Defense in 2014 gave UI Labs, an independent, not-for-profit applied research and commercialization organization, $70 million to create the Digital Manufacturing and Design Innovation Institute (DMDII), one of nine public-private manufacturing hubs that currently make up the National Network for Manufacturing Innovation, or NNMI.
The DMDII and GE a year ago said they had teamed up to develop the DMC, in part to save manufacturers of all sizes millions of dollars by democratizing the flow of innovative digital manufacturing data. The DMC is being built on a platform GE scientists had demonstrated with DARPA, the Defense Advanced Research Projects Agency of the DoD, and MIT a few years earlier.
DMDII plans “a full launch” of the DMC by the first quarter of next year, Barkley said.
Beta testing, which began in February, will continue past the DMC’s launch. “We are doing an agile development process on this project,” he said. “So we are rolling out new features that we want tested, as well.”
One new feature: A membership “portal,” which would allow membership interaction and communications. “We have a lot of R&D projects we do with members, and a lot of those have strategic communications associated with them,” Barkley said. “They want to connect with each other. And right now, we’re making these connections in a more manual kind of way.”
The DMC is meant to operate like an app store where manufacturers go to use tools or apps to solve problems or work more efficiently. They might program machines, design assembly lines or find properties of a tool or material. When a manufacturer solves a technical challenge, it may also be able to collaborate and share that solution with others.
“Part of our charter at DMDII is that we are neutral territory for everybody in industry,” Barkley said. “We are non-competitive, and that allows us to have a special role in hosting these platforms that are trying to bring different arms of industry, government and academia together.”
The DMDII is working to swiftly populate the DMC online community with open data and software, as well as case studies that show how real-world problems were solved.
The institute is also formally contracting for new content: It is planning to invest roughly $1 million in five DMC-related projects that will run either 12 or 18 months each to turn out “what we perceive to be really key value cases to solve some fundamental pain points for the manufacturing base we’re trying to help,” Barkley said.
—Brett Brune, Editor, Smart Manufacturing
This article was first published in the August 2016 edition of Manufacturing Engineering magazine. Read “Manufacturing Gets Mixed Marks at Midyear” as a PDF.