In light of new Philadelphia Federal Reserve numbers, manufacturers must move to ensure their gains are sustainable
Many of the recent leading surveys on the state of U.S. manufacturing have supported the conclusion that the industry is moving slowly toward a recovery. The latest survey regarding this topic, from the Philadelphia Federal Reserve Bank, released some of the most positive news yet for manufacturers in the mid-Atlantic region of the country – a rise in its business activity index to 8.7 in October from minus 17.5 in September, an increase of more than 20.
According to Reuters, the production and activity of manufacturing facilities in eastern Pennsylvania, southern New Jersey and Delaware are included in this survey. Interestingly, economists expected that the expansion would only go as high as minus 9.0, and the fact that the numbers for this month are the highest reported since April of this year can only be seen as cause for significant surprise.
The news source reports that this may be suggestive of more widespread growth in the manufacturing sector throughout the nation. Although this will only be confirmed with the release of October's Institute for Supply Management (ISM) index numbers at the beginning of November, the Philadelphia numbers and the small but notable increase in the ISM for September offer indications in that direction.
Manufacturers in the region covered by the Philadelphia Federal Reserve Bank survey will have to ensure that the gains they are experiencing can be retained. Businesses in this sector must continue to grow top-line by expanding into new markets, including exports, diversifying their customer base and developing new products and service offerings. Performance improvement practices such as lean and six sigma not only reduce waste to drive down cost, these efforts also encourage a continuous improvement culture necessary to compete today.
With the prevalence of advanced technologies in manufacturing, new innovative solutions can be realized to grow significantly.
However, these solutions require skilled workers for their successful operation – as evidenced by the presence of 600,000 industry jobs some industry leaders claim cannot be filled, according to the Minneapolis Star Tribune.
One way of reacting to this shortage is for businesses to train members of their existing workforce in the use of these advanced systems and to increase efforts in finding new employees with the proper education and experience in those techniques.