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Can the US Manufacturing Sector Handle a Full Economic Recovery?

The manufacturing sector is on an upswing as our first quarter comes to a close. With the popular consensus being that the US economy will continue to improve, an important question comes to mind. Is there capacity in the US manufacturing sector to handle a full economic recovery?

The increase in manufacturing activity became readily apparent at Universal Polymer in December of 2014. In previous years, for every market we served there has been a downturn toward the end of the year. Traditionally, December is 60-70% of normal sales, with March and April being pretty consistent.

At the end of 2014, however, we noted at Universal Polymer a sizable boost in manufacturing activity. This trend is continuing now as we reach the end of our first quarter. The increase spreads across each of our major markets, from the automotive OE supply chain to the construction and pipe manufacturer’s market.

The increases in the manufacturing sector are at least partly due to the strength of the automotive market, with upwards of 17 million cars built in North America in 2014 alone. The forecast was for the auto market to continue to strengthen in 2015. However, the news is not all positive. There is a big looming question of whether the manufacturing sector can meet with the economic changes.

For example, consider the housing market. While it has incrementally risen over the last few years, if you compare the housing market today to 50 years ago, as was done by Wisconsin Real Estate Viewpoint, it is still in the lower 5% of that period. The capacity has been taken out of the housing market in every level. Housing starts are the lowest per capita that they have been since the Viewpoint study began collecting the monthly data in 1959.

What will the next 50 years hold for the manufacturing sector? Universal Polymer will continue to update you and consider the implications as they relate to the US economy.

Seasonality in the World of Manufacturing

While most of the country is worrying about staying warm and digging out from another polar vortex, it’s spring and summer time at Universal Polymer! Well, don’t get us wrong, it is still very (very!) cold here in Ohio. However, this is the time of year orders for plastic and rubber extrusions come flooding in from companies that specialize in warmer weather products. That is the thing about the start of every year, while there is a manufacturing and construction lull during the holidays, it disappears the second the calendar flips to January and February. So, who are the companies and industries that are working so hard to plan for the long hot days of summer?

The lawn care and lawn mower industry is one such industry in full manufacturing mode. According to experts, consumer lawn and garden equipment is worth staggering $5 billion and close to 68 million American households maintain their own lawns. As you can imagine, some of the biggest names in the industry are currently running 24-7 to be ready to satiate this overwhelming demand. If you look at a lawnmower, you can see that rubber molding, and rubber and plastic extrusions, play a major role in keeping them running at peak performance.

The outdoor equipment industry is starting to slow around May, which is when the construction season is just being ramped up. The construction industry, which was worth $900 billion in 2013, must take full advantage of the warmer weather to get projects started and completed before the cold weather returns.

For us at Universal Polymer, it is critical that we time these seasonal shifts carefully. In order to maximize profits and keep our customers happy year in and year out, we make sure to expedite production during the busier times. So, never fear, no matter what time of year it is, Universal Polymer is prepared to handle what ever you can throw at us!