Home > Main > TC Midwest Manufacturing Survey shows continued, robust growth

TC Midwest Manufacturing Survey shows continued, robust growth

May 31, 2011

The Trader’s Crucible Midwest Manufacturing Survey shows the midwest economy continues to be strong due to a rebound in manufacturing. Some quotes from the report:

  • We had record months in April and May.  June and July will break these records.
  • We have orders and work booked through September – our farthest bookings since the late 1990’s
  • Steel prices are up dramatically over the beginning of the year.
  • We are turning away work for the first time in years.
  • We cannot find enough qualified people at current wages.  We are hiring and expanding.
Ok, the TC Midwest Manufacturing Survey is just me talking with my dad. We were able to have a great chat on Memorial Day.  His business is fully leveraged to the aluminum and auto parts industry here in the states.  His clients are running full blast and are willing to pay extra for immediate work.
Good news for the U.S. economy overall?  I don’t know.  My personal experience with his business over years has been that it is tightly coupled and a coincident indicator to the overall economy.
I am slightly skeptical of the Chicago PMI that came out today.   Most of the quotes seem to talk about high commodity prices, and not as much about slowing business.    The internals seem to support a screaming manufacturing sector.
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  1. Detroit Dan
    May 31, 2011 at 4:27 pm

    Hmmm. No wonder the company profits are up. The forward looking indicators don’t seem so favorable, though. My impression that we have an inventory bounce which has already peaked as indicated by most of the regional manufacturing indexes. Perhaps your father’s business is benefiting indirectly from the Japanese tsunami damage?

  2. TC
    May 31, 2011 at 4:39 pm

    I agree on the forward looking indicators. They do seem to be plateauing or even moving down. Prag Cap’s rail indexes still look strong.

    Inventories are down right now in the Chicago Purchasing Managers index.

    I do not think he is benefiting much from the Tsunami damage. His business has been going well since roughly Nov. last year. I don’t think many of his clients supply parts for Japanse car makers, but I could be wrong. They are mostly domestic.

    I think part of it is actually due to the ongoing failure of Mexico. The northern border is turning into a narco state, and several of his companies are shutting down/winding down plants in northern mexico and moving operations back here.

    He is having record months, and several of his clients have hinted at even bigger work for him. These are clients he has had for a long time, so it isn’t like he is getting lots of new clients. he is getting some, but the bulk of this is coming from people he has worked with for a long time. They are just really busy.

    It is strange, because he also says its either all or nothing. Plants that are going are working 6-7 days. other plants are shutting down.

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