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Latest Data Shows Uptick in Manufacturing Activity: Is Your Supply Chain Ready?

Updated: Oct 23, 2018

As a recovering economy generates more demand for large equipment, manufacturers will be increasing their orders with distributors of fluid power components—setting the "bullwhip" in motion. Daman Products is poised to help our customers manage this effect by ensuring that a steady supply of custom and standard hydraulic manifolds and associated products is available, and that quotes for new custom products can be turned around quickly. Below, we'll discuss a few data points that show why companies need to be prepared to deal with a spike in demand.

The Institute for Supply Management (ISM) recently released the February update to its Purchasing Managers Index (PMI), which is widely viewed as one of the best gauges of U.S. manufacturing activity. The PMI, which indicates expansion when above 50, rose to 53.2 last month, up from 51.3 in January.

Another index showing the rate at which new orders are being placed also ticked up in February. Ameriprise Financial senior economist Russell Price, who is one of the best predictors of ISM indexes, according to Bloomberg News, said manufacturers should expect this trend to continue, due to the release of "pent-up demand in the consumer and corporate sectors."

According to ISM, February was the ninth consecutive month in which the U.S. manufacturing sector expanded, and the 57th month of overall economic growth. The most recent employment situation report from the federal Bureau of Labor Statistics reinforced a positive outlook for the economy, showing that about 175,000 non-farm payroll jobs were created last month. Reuters noted that this number significantly exceeded economists' expectations.

With things finally looking more stable for both the manufacturing industry and the economy as a whole, it is time for companies to ask whether their supply chains are prepared to sustain a higher level of activity. ISM's data indicated that many organizations may need to kick things up a notch—an index showing the amount of backlogged orders increased more than twice as much as the PMI.

At Daman Products, we're prepared to do our part to sustain the recovery by helping companies build better industrial systems with high-quality standard and custom hydraulic manifolds, delivered at the right time, in the right quantities. Contact us today to learn about how our unique Daman Trigger Systemcan eliminate waste and increase efficiency in your distribution system, leading to more satisfied customers and, ultimately, more sales.


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