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Thread: The economy and CNC shops
03-31-2008, 04:13 PM #1
The economy and CNC shops
I was havin a discussion with some friends over a few adult soda's the other day about the economy. They tell me it's in the dumper. The worst it's been since the depression.
But....all my customers are doing well. I do some marine parts and that business has tripled in the last 8 months. Medical biz has grown at a steady 9% or so a quarter. I just ordered a couple new machines and I have customers that were asking when I was going to do that as they have work to send.
I don't see all the doom and gloom.
One interesting indicator for me anyway, is the prototype business has picked up at about 10% a quarter. Steadily...
I'm startin to think them news guys may not be tellin all the story.....
03-31-2008, 04:58 PM #2
I am sure your werld is 100% diff from ours over here in the Great Lakes area.
While medical anywhere is a boom (not sure why? Doo we break more bones now than in previous decades?), but so much of our werk has gone to China. There are still many shops closing up yet in S Mich, and prolly N Ohio too.
Other than a cpl of blankets that I have currently - I have not seen blankets since 2000. And only a small % of orders in the 6 week area, with MOST being in the 2 week area. Awfully hard to werk under those conditions. There is NO forcasting to be able to hedge your bets. Not saying that we're slow as such, but feast/famine is seemingly day to day around here. ???
Your area tho is obviously based largely on Boeing. Whether a particualr shop actually runs plane parts or not - the guy next door does, so if Boeing is busy, everyone is busy by default. I have fealt the plane industry hit here too as I can remember yrs when I couldn't git 2024 since Boeing was suckin' it all up!
But the low dollar has Shirely helped your area a LOT! Your competing with the Euro, not the Yaun that we are. The low dollar is always good for manufacturing jobs, but when our competition is tied dogfast to our currency - it just doesn't come out in the worsh quite as quickly. The high cost of fuel for shipping Shirely has a floating effect tho.
We seem to be getting some werk back in from China tho, or at least one of our customers aint overly happy with their supplier/prices anyhow. It's still touch and go on that subject yet tho. But it seems to be barely werth the aggravation of importing - which is a LOT better'n past yrs!
We have picked up a few new customers recently doo to werd of mouth, and likely it has something to doo with other shops closing up?
So - if your in the PNW (or Kansas?) making plane parts, making med parts in Fla, or oil field stuff in OK/Texas/AB - the low dollar has made your are a boon, but if your in [the old] auto area - forget it!
That is my story - and I'm stickin' to it!
03-31-2008, 05:10 PM #3
If your just pushing paper and trying to make money while not actually doing anything, I can see there being a problem.
For us folks that actually make stuff, I think the low dollar is helping us out, there is now not as much incentive to go overseas, and its cheaper for foreigners to buy our products.
Business wise we're going strong, and actually pushing work away.
Personally, gas is scaring me, I paid $3.73 the other day, so now I only go to work twice a week, (but I stay for 2 or 3 days at a whack). Propane to heat my house really beat me up this winter. I'm not seeing it as that horrible, then again, I didn't overextend myself on one of those interest only loans on a $500k house.
03-31-2008, 05:32 PM #4
I have also seen my work load increase over the last month or 2. Also, I have picked up a couple of new customers. Generally, if my shop is busy, then so are the other local shops. This area is still o.k. as far as the economy is concerned. Gas is high here as well, but I just try to burn as little as possible.
03-31-2008, 05:43 PM #5
I work for an engineering product design/development company and we are slammed. It looks like we are backed up for more than a year with plenty to do and cannot get help(3% unemployment around here). Most of the work that is lined up for the next year will be exported to middle eastern countries, or will be for domestically manufactured products that will be sold in the US and abroad.
03-31-2008, 05:50 PM #6
Jim, don't forget the NW has traditionally run on a slightly different economic cycle than the rest of the country. We see recessions later and are the last to recover.
In the NW we're also an export economy. The dollar is getting so low that American goods are becoming bargains. That aids the NW to some extent. The NW is also becoming a high tech mecca, that's another thing in our favor.
We are seeing some major effects though. For the first time our housing showed a slight drop in value, around 1% in Seattle I believe. Sales are slowing considerably in the under $1M market. The higher end around $1.5M is still booming.
Close to home, my son just wrapped up his job as a construction superintendent on a 180 unit condo project. Now he finds out the Australian bank repo'ed the whole project. Sales in the $300k range slowed so badly the investors couldn't make payments. That was a major hit for the investors.
Going into retirement I see the economy as scary for a number of reasons. Nobody has been regulating the investment banking business, nonsense like mortgage backed securities, etc. The war in Iraq is draining the country for no good reason and will continue for decades. The stock market is going like a roller coaster. Speculation in petroleum has run prices up. American prestige abroad is at an all time low. Consumer confidence is approaching a 35 year low. Just plain scary to me. And Bush proposes to give away $150B to help out, yikes!!!!
But, I know what you mean about business being good. The few customers I kept are doing well. As I mentioned to you in another forum the major investment you're making is beyond my risk tolerance.
03-31-2008, 06:06 PM #7
Down here in southern california sucks. The medical supply company we do work for is steady but everything else has dropped considerably. I have 7 employees and we currently on 4 day weeks. That 4 8 hour days not 10. We handle alot of overflow fab for aluminum extruders and haven't got anything lately. Last year was really well. Our sales were up $200,000 from the previous year, but this year I'm just trying to stay afloat. I seriously hope things turn around soon. I start a cnc training course through the NTMA next week. Hopefully that will help hone my self-taught skills and I can take on some more complex jobs and open me up a bit. But it is without a doubt extremely bad in these parts. I recently started advertising with MAcRaes bluebook. So hopefully that will work out. Best to all.
03-31-2008, 08:06 PM #8
Over here in Blighty, it's generally on the up.
Lots of things coming back from china, as they have started to put their prices up.
They realised why charge £1 for something that in the UK costs £5, and have been putting their prices up to say £3. Well, that then makes the differential less, and their inflation soar.
That said, commercial things like taps, kitchen fittings, white goods, tv's etc will probably never return here for manufacture.
The biggest problem here at the moment is material prices. Up up and away they go.
Still, british steel is now owned by the indians, british gas by a canadian insurance company.
We own nowt here now, and get the pi55 taken out of us.
I do have a laugh about the constand moaning of your fuel prices on the forum.
Here diesel is $10.80 and rising by the fortnight!!!!!!!
Our company is a bit like OX's, its feast (double shift when we have to) or just ticking along.
I worked previously for a company that leaked money. We had a factory that was twice the size needed, and were always on a hiding to nothing just to pay the rent, let alone expensive machine repayments.
I think gently gently at the moment, and keep the finance payments to a minium, what with all the bad talk of stateside recession etc.
03-31-2008, 08:39 PM #9
Ox is right about the mid-west areas that thrived when the Big-3 thrived. Many companies large and small have gone away.
Now, the American autro makers get their stuff overseas, while the Japanese car manufacturers here in the states use local shops. Ok, but in states like Ohio and Michigan, where's there's 1 or 2 Jap car places, there are only a handful or so of US makers when there used to be handfuls. Northern Ohio and southern Michigan aren't doing so good. The central and southern parts of Ohio are moving along a little better.
Every election year, the press comes up with "recession" talk. All it takes is one Economist to say that if things keep going the way they are, the US will be in a "full recession". This time, those lying theives started a year earlier with campaigns. Been a hoot to watch...a little scary, too.
The United States will be fine...anyone remember the gas lines of the late 1970's? I barely do, 'cause I was just a little 'nard.
Anyway, things are different all over.
BTW, work is steady here, for now.
03-31-2008, 09:40 PM #10
Today just ended one of my worst quarters to date, with the 4th quarter FY07 being one of my best. Prototyping is pretty flat over here (for me at least). There hasn't been much since the end of Oct.
03-31-2008, 09:49 PM #11
That's interesting. It's been increasing 8 or 10% a quarter here.
Mostly high tech and medical...
03-31-2008, 09:56 PM #12
Gents... I am on the front lines. We are slammed. Medi, Aero, Defense, Guns.... All very busy. All the improvements we made during the slow times are now paying off in spades. not to flex or sound cocky mind you, but we see that the above markets, plus and increase in semi conductor sales, is going to push us through the year. California, New England, South East, North West, and South West are all breaking there YEARLY quotas already.
03-31-2008, 10:10 PM #13
Yep, first quarter 08 has been our biggest ever, and would have been a lot bigger if not for some major hiccups at the utility company. The second quarter will be the biggest yet, and we should be finished with our move by the start of the third quarter. I haven't made any sort of sales call in over a year, and have actually been ducking potential customers because I don't want to tell them lead times are 5 months.
03-31-2008, 10:16 PM #14
03-31-2008, 10:22 PM #15
2008 is going to be my best year by far since I started my shop in 97' I can see that already.
A lot of my work is for individuals who are directly the end-user, custom stuff. No recession there.
The one-off prototypes and tooling has picked up ALOT. No recession there either.
We are a two man shop and are now looking into upgrading to a small CNC toolchange machining center so we don't have to baby sit the CNC knee mills all the time.
Kind of like having an employee that does'nt call in sick or talk back.
It's looking good here.
03-31-2008, 10:24 PM #16
I'd go along with VMCman here.
The business I attend has guns ,medical bits and boat parts as main customers, plus we've been able to do some undercutting due to new technology (life suddenly gets better when you have 3 4th axis machines).
Example being the part I'm working on, we have 90 mins to machine each one based on previous quoting, currently we've used up 35 mins of that time and the next op will take 22 mins( or quicker) and the final op is 3 mins. so we could drop the price on the part another 10% and still make a profit
Most of the customers we supply are ordering lots of stuff, well the guns for an obvious reason(and yes they are sold to the US military.... so I end up with YOUR tax dollars heh)
Times are tough, but the stuff is coming back from China ... and going to Poland
or its being done here again because there's nothing like a 3 month delivery on wrong parts to stop a line from moving and concentrate management minds on what a *^&^ up they've done.*
* Especially when they call previous local suppliers and they turn round and say "tough luck... we got new customers now"
03-31-2008, 10:29 PM #17
Business is ticking along at the usual pace...no slowdown seen here in Virginia. Coal mining is a big driver for business in my part of the country...and coal is booming.
The media is hell-bent on talking us into recession.
03-31-2008, 10:52 PM #18
AMEN, cnctoolcat!! Check it out...EVERY election year. The main media in the US is SOCIALIST! If you look at the lib politicians, they can't survivie without a voting base that feels downtrodden. The Dem's motto should be, "Keep 'em poor so we get some more!" There is no need for a SOCIALIST agenda in AMERICA, without a HUGE GOVERNMENT to regulate everything. Imagine a SOCIALIST medical system in the US. Take Kaiser-Permanente and down grade them by 100%...the best medical pro's will still go private. F-the private citizen. Keep in mind that the poor in America don't pay for medical care or pay income taxes! STUPID PEOPLE HAVE THE SAME RIGHT TO VOTE AS THE SMART ONES!!
Last edited by metlhed; 03-31-2008 at 10:53 PM. Reason: had AND instead of AS
04-01-2008, 12:21 AM #19
I take it you think the economy is doing just fine, huh? How's your IRA or 401K doing?
Mine's down about $200K from last fall. Should I blame the socialist media for that?
04-01-2008, 01:05 AM #20
1. Hitler had a certain moral (Christian) following that granted him power
2. Hitler had a strong manufacturing base to feed his war machine
The Islamic terrorists want to kill all who will not convert to Islam. Iran is the major funder of those terrorists. We are in Iraq and Afghanistan squeezing the "head of the snake". Get it now?
Here's an idea: elect those who want to put major gimmies and socialist programs into play while capping the largest earners with a tax. Call France and see how appeasing the enemy is going. Why not take you and your company to Canada so you can no longer support the Capitalist agenda and figure how much you have to pay in taxes to get sub-par free health care.
Retire on that, Doug!
I am so sick of those that prosper in the best times, but cry when it gets tough...even a little bit. My Grandmother (German) would spit on you all...she had 3 sons fight against the Socailist movement of Hitler. I am ashamed to associate with the so called Americans that would rather give in and try to talk to our enemies. Does Joe Kennedy ring a bell?
It does not take a college education to succeed in business, but to realize the political implications in placating our sworn enemy must take some intelligence. BTW, most large companies (incl. oil) are publicly traded. If they are not part of your portfolio, then shame on you!!