September 13th, 2011 
Jonathan Dionisio 
I’ve always talked about the stability and profitability of the manufacturing industry, and how it makes for ideal acquisition opportunities. But with the global manufacturing industry in somewhat of a halt, is it still advisable to buy a manufacturing business for sale?
Let us assess the current situation. Purchasing managers index (PMI) results across Europe, Asia and the US are either at their lowest or continue to slow down. Based on the global purchasing managers’ index compiled by JPMorgan, the manufacturing sector was again struggling last August. Although numbers are within the growing threshold, it still suggested a weakness in demand.
In Asia, China’s PMI suggests even slower growth. Japan is on a three-month low. South Korea’s and Taiwan’s indexes fell sharply. The slowdown has affected European countries, even manufacturing powerhouses like Germany and France. UK’s PMI revealed that export orders and production have crashed to their lowest since May 2009.
As for the US, the Institute of Supply Management revealed the August PMI registered at 50.6 percent, a decrease of 0.3 percent from last month and overall, the lowest since July 2009. This was way above the 48.5 expected by investors and analysts. The result indicated that manufacturing in the US has been ‘growing at a slower pace’. The highest index for this year reached 61.4, attained last February.
Neil Dutta of Bank of America Merrill Lynch said that the data showed the US economy "is weak but not collapsing.” Meanwhile, Sean Incremona, economist at 4Cast Ltd in New York said "The headline was resilient and we are pleased to see that, but if you look at the breakdown it is much less positive. New orders remain below 50 so that is not a good forward-looking indicator."
Surely it is not something to rejoice about. But this only proves that the manufacturing industry continues to be resilient. Yes, it has been affected by the political and economic setbacks but it remains steadfast, posing growth when everyone thought it would finally contract.
If your company was thinking of buying a manufacturing business for sale, continue your quest. Do not let this hinder your plans for business expansion. Yes, full recovery is a long way to go. But we are getting there. If you hold off on your acquisition plans, then you are placing your company’s future on hold as well. Savvy business owners are remaining strong during these times and making the strategic move to go forth with acquisition plans. Will you be one too?
Sources:
http://www.reuters.com/article/2011/09/01/us-usa-economy-manufacturing-idUSTRE78031P20110901
http://www.ism.ws/about/MediaRoom/NewsReleaseDetail.cfm?ItemNumber=21828
http://edition.cnn.com/2011/BUSINESS/09/02/world.manufacturing.outlook.ft/index.html
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[...] DiggA couple of weeks ago, I did a review on how the manufacturing industry is holding up (read Assessment: The Resiliency of the Manufacturing industry). Admittedly, according to economic data here and in other countries, the industry does seem to be [...]
Hi Jonathon – I work for a flange manufacturer here in Houston, Texas and am always looking to keep up-to-date with the goings-on in the industry. A strong manufacturing industry is important to a vital, healthy economy. Investment in manufacturing, especially American manufacturing, will help the industry as a whole.
Anyways, thanks for sharing! – Aly