Is work going down because we are in a recession?

[blackwolf4278]

Hi All. I own a small shop in central CT and i see a lot of work decline down here, I’m not sure what is going on, most of our customers that we do offload work have nothing for us to quote, 1 friend of mine that owns a slightly bigger shop than mine says that he’s only running 2 machine out of 10, other two guys had to completely close and find jobs for now because they dont have work at all.

So i guess my question is how is work in other parts of the US and if anyone as ideas on whats going on?

 

[Scruffy887]

My answer may depress you. 1st quarter was 50% down, 2nd quarter is looking to be worse. I just do not give a flying rats arse about it. More time for me to completely fak off. Keeping busy on shop improvements, more efficient production fixtures. Building some needed work tables. Building an insulated wall, throwing collected very valuable crap in the dumpster, taking long weekends. My 2 guys will work 40 hours next week. Me? Not so much.

 

[Radar987]

How many customers do you have? Where's your friend located? I think your experience is localized. Things are busy here. Talked to a lender the other day and he said things are busy for him too.

If you're not actively generating sales, you don't have an accurate snapshot of the economy. You're just waiting for some local customers to throw work at you. There will always be slow periods, even when the rest of the economy is booming. Even if it's not geographically local, it's "local" to your existing customer base.

The media likes to talk about recessions, but the people writing those articles don't actually know shit about the economy. They're just feeding off the fear of their readers and writing sensationalistic stories. Then they get input from so-called "experts". Well that's fucking stupid too, because they're cherry picking people who confirm their stories, not people who deny them. Confirmation bias.

Here's the thing about human psychology. Someone posts a thread about recession. Most of the people replying are going to be feeling a slowdown too. Those who aren't are going to read about others who are and then second guess themselves, and not respond out of fear of jinxing their good fortune. So the problem keeps compounding. Misery loves company, so if one guy is slow, it gives some comfort to the next guy who's slow, and then the next guy who's slow, and then all of them attribute the slowdown to recession, rather than actively seeking work.

Chin up. This isn't 2008. Go find some work with a positive outlook and you will find it.

 

[plastikdreams]

I work for a large aerospace company so ymmv but so far we are up a good amount over last year.

 

[DanASM]

Straight out and getting rfq's every week. I got caught up a little bit and earned some time to rest up. Catch up on some machine maintenance, get my garden going at home, Get another snowboarding day in (May 6th Killington VT).

If I had machines with some more capabilities, I could take on a lot more work as well.

Gotta keep on searching for jobs, never ever stop doing this. Even when you are straight out busy, always keep looking for jobs. They dont always just pop up when your slow. Gotta get the ball rolling way ahead of time.

 

[kpotter]

If you sell products related to cars and trucks you are really vulnerable to the price of gas. A good friend makes lift kits his sales tank when gas goes over 4 bucks.

 

[Conrad Hoffman]

We buy a lot of small fussy parts where I work and the few shops that can do them are as busy as ever.

 

[mmarquette]

Guy I know that does excavating for a guy that build high end (2mil) homes says slowest he seen since 08 . Supposed to be some houses on the table but no promises till it’s final . Central Kentucky . Not the same market but if the people with money slowing down that could really show something .

 

[Ries]

The economy is regional, not national any more. And certain classes of people have tons of money, others are getting pinched big time by price increases. So some places, its gangbusters, other places, slow. Real estate here is still insanely expensive just not going up as fast. We do a lot of aerospace and tech around here and its still going strong.

 

[CarbideBob]

The economy is regional, not national any more.

Any more .... or always has been?

 

[Garwood]

If you sell products related to cars and trucks you are really vulnerable to the price of gas. A good friend makes lift kits his sales tank when gas goes over 4 bucks.

I make some automotive stuff for the prepper types that skyrockets in popularity when gas prices are high. It's been barely tinking along for years, then all of sudden I've had an explosion in that market this year.

I also do repairs for timber machines. I have not had a single timber job this year. I hear the lumber mills have ultra deep coffers overflowing with cash after fucking everyone on lumber prices through the pandemic, but now lumber is FULL STOP. They're desperately trying to keep prices high artificially, hoping demand will pick back up this summer, but I don't think it's going to be anything like it was.

I'm betting on $5 12' 2x6's by July this year.

Overall, I'm doing great. 2023 is shaping up to be a good year.

 

[Strostkovy]

We make offroad bumpers and I'd say sales are down to 60% of what they were half a year ago. We aren't losing to competition either, everyone we've talked to is in the same boat.

 

[cnctoolcat]

Federal Reserve interest rates were effectively zero for 15 years. By ignoring the obvious signs of inflation early on, the Feds have had to raise interest rates dramatically. And this is now starting to catch up with the economy.

Three large bank failures. Massive layoffs in Tech, industry-wide. Retail chains retreating or closing up entirely. Commercial real estate is in for a big shock: over two trillion in low-interest financing is due to reset to current rates, making many mortgages and properties unviable. There's lots of vacancies on Main Street already...

Like Ries said, large areas of the economy are doing well. Aerospace and defense are busy. After all, we're trying to go to the Moon and Mars, and we're providing the lion's share of the hardware to Ukraine to fight the Russians.

Oil is busy in spots, slow in others. Depends on the economics of the well...many factors. What's left of the US coal mining industry is busy, a lot of it high-grade metallurgical coal going overseas.

Construction still seems to be busy, although with higher interest rates housing is surely to soften at some point.

Automotive is still busy, although dealer's lots are finally starting to show some inventory. Sales for EV's have softened, and the industry is quietly worried about it.

Interesting times...

 

[Ries]

Any more .... or always has been?

I think its significantly more than it used to be. There are whole large swaths of the country, probably between 35% and 50%, where the average house is a million dollars, where crummy jobs pay 20 bucks an hour, and you still cant live on it. Then there are places where you can still buy a house for 50k.
The geographical disparity is much more pronounced now. It used to be cheap an hour and a half outside of Seattle. Now, you have to drive 15 to 20 hours to get to the impoverished rural areas.
We have a local employer who does $400 million a year gross, mostly aerospace and defense work, and all their subs are busy busy busy. Boeing is back ordered for something like 1000 airplanes, and them things cost around a hundred million apiece. So all their subs are also quite busy.
Tesla just bought a 245,000 sq ft warehouse an hour down the road.
Washington state revenues from manufacturing were 95 billion last year. Idaho, 9 billion.
So just a state away, everything is very different.
When I was a kid, rural Idaho was pretty similar to rural Washington, in terms of salaries, real estate prices, and amount of manufacturing.
It has changed radically. The poor states are a lot poorer than the rich ones now.

 

[BT Fabrication]

I'm busy as all heck, crazy how people just come out of the woodwork and throw jobs at me, not even need to quote, just hey get this done. couple weeks, sure, whenever. probably 3-4 weeks behind currently.

 

[pgmrmike]

We are in oil related work, some are very busy, others seem to be slowing. My biggest customer has been trying to do everything in house but had been keeping us busy until the last few weeks. Apparently upper management has told them to keep it all in-house, period. Shop management says it cant be done with the eqpt/space they have. Seems to be a bit of a disconnect there.....but what that tells me is that costs are a problem, or the market is tight and prices are really competitive so they arent making the money they want/need.

The part that gets me is that they have told me several times that it is cheaper to have us run many of their parts than it is to do it in house.

Bit of a quandary there, and I m getting nervous about how its going to shake out.

Due to all that, I have been looking for new customers and two decent size oil tool companies that I had dealt with in the past ( as an employee ) have shut down. It really shocked me that one in particular had given up.

 

[Comatose]

It's a weird time. There were some real and some artificial shortages and price hikes. Many of my customers (we make power electronics that control other people's products) have closed up shop from being starved for years. We flat out couldn't get components to make anything for a year. Now all the electronics part suppliers have stock and are finding the customers are around anymore, but don't want to come off the 40-100% price increases they pushed through in the past couple years.

 

[Kingbob]

We've been "uncomfortably busy" for the last 6 months and I've been collecting quotes on new equipment. We service mostly our regional chemical and refining industries and have been making steady gains marketing to equipment repair shops nationally. Dad is full time sales and he's getting close to his personal goal of a customer in every state.

 

[604Pook]

Its strange around here in BC, Some places super busy, some not.
Some of the large local sawmills, have cut shifts, stating building lumber and plywood demand has dropped.

 

[CarbideBob]

It's a weird time.

Maybe not so wired just the normal ebb and flow.
Oil is off and auto might be up.
Areo is off and oil work is up. Auto is crazy fast and oil or semiconductor way off.
There are waves of good and bad for all shops. The trick is to save enough during the good times (and know it) to ride out the bad times.
I do not see a recession even with the fed putting the brakes on and trying to slow things. I do however think this a risky move for a "soft landing" and hopeful.