October 13th, 2011 
Jonathan Dionisio 
Despite the global slowdown, manufacturing companies in the US continue to remain profitable and show signs of growth; proof that the country is not falling into yet another recession.
The latest Purchasing Managers’ Index by the Institute of Supply Management registered 51.6 percent, an increase of 1 percent from August, indicating expansion in the manufacturing sector for the 26th consecutive month, at a slightly higher rate. This was a surprise to economists, who anticipated a weaker report.
The Production Index registered 51.2 percent, indicating a return to growth after contracting in August for the first time since May of 2009. Manufacturing companies also increased their workforce, with the Employment index hitting 53.8 from 51.8 last month. Exports are also doing well.
Of the 18 manufacturing industries, 12 are reporting growth in September, in the following order: Wood Products; Petroleum & Coal Products; Food, Beverage & Tobacco Products; Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Machinery; Miscellaneous Manufacturing; Transportation Equipment; Plastics & Rubber Products; Printing & Related Support Activities; Chemical Products; and Computer & Electronic Products.
The following manufacturing businesses for sale are listed on Corporations4Sale:
- Manufacturer of Custom Signage Products and Dimensional Props
- Plastic Injection and Transfer Molding Services
- Finishing Services for Screw-On and Snap-On Tops
- High Growth Fence Business For Sale
- Nickel Electroforming Services Company for Sale
- Reputable Manufacturer of Soybean Flakes
- Manufacturer of Medical Device Business For Sale
- Precision Machine Shop in Niche Market for Sale
- Profitable Wholesale and Retail Winery For Sale
The results look promising. “There is general relief in terms of the overall economy,” said John Silvia, an economist at Wells Fargo. “We’re not picking up momentum, but we’re not losing ground either.” However, Joel Naroff, chief economist at Naroff Economic Advisors reminds everyone not to “confuse direction with speed” of recovery.
He has a point. One key component of the index – new orders – was unchanged at 49.6, a third straight month of contraction. New orders represent what factories will produce in coming months. Looking at the entire report, manufacturers’ backlog of orders shrank, while customers’ inventories rose, signs that customers aren’t placing new orders as old ones are filled.
“New orders are really the thing that moves this whole sector,” said Brad Holcomb, chairman of the committee that conducts the survey. “Production is high and it’s returning to growth… but it’s being used to work off a backlog of orders, which is contracting.” Although far from the 61.7 percent new order index in April, the manufacturing industry’s show of strength will continue to dispute naysayers that we are headed to another recession.
Just as I’ve been saying, manufacturing businesses for sale are one of the best acquisition opportunities available on the market. Click on any of the companies for sale listed in this article or visit Corporations4Sale.com to find out more.
Sources:
http://www.ism.ws/about/MediaRoom/NewsReleaseDetail.cfm?ItemNumber=21959
http://www.reuters.com/article/2011/10/03/us-usa-economy-idUSTRE78C33C20111003
http://money.cnn.com/2011/10/03/news/economy/manufacturing/index.htm
http://online.wsj.com/article/SB10001424052970204612504576608723239577098.html
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