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Comments from Survey Respondents
These comments are from respondents’ completed surveys and have been edited for publication.
Primary Metal Manufacturing
- The price of copper has dropped dramatically in the last month.
- Health insurance costs are really high.
- There has been a rapid decline in orders over the past 30 days, primarily in energy-related work. Overall, business has declined by 30 percent in the past month, and our forecasts, based on customer feedback and order volumes, indicate further decline in overall business. Materials prices continue to decline as well, and a further decline is expected for most of the raw materials used in our processes.
- Imported steel continues to be a major issue into Houston and other ports. It has very low prices, often subsidized.
Fabricated Metal Manufacturing
- Our work is generally energy related, and the decrease in capital budgets for 2015 and 2016 will have a short- and long-term effect on our production and profitability. We are not adding to our backlog from the fourth quarter.
- We are starting to feel a slowdown with our oil and gas production equipment customers. We anticipate the slowdown has just started and it will not hit both until another six months because the current backlog is hiding the immediate slowdown that had already started three months ago in well drilling.
- We are very much affected by the crash in oil prices.
- At the beginning of the month there was a wave of projects that were either cancelled or placed on hold by the customer.
- A slowdown in capital spending is happening quickly. Maintenance spending is on hold due to the strike.
- We are starting our fifth year of recovery in nonresidential construction, but new construction volumes are still below 50-year troughs. The recovery is occurring but it is at a modest pace.
Machinery Manufacturing
- Oil at $50 per barrel is painful. We laid off 25 percent of our workforce to match labor with demand. The current thinking is if we can get through the first half of 2015 unscathed, we will be okay in the second half. We’re optimistic that things will be better in the second half of the year in the offshore energy market.
- The oil price is driving down drilling activity in North America, and our business is strongly correlated to the number of active drilling rigs. We have a tough couple of quarters ahead.
- Customer order activity has slowed a little more than is seasonally normal. We do not know if it is temporary and primarily winter weather related, or a future planning disruption caused by the sharp drop in oil prices.
- Oil prices have not affected backlog or sales yet. But we assume that they will in the future.
Computer and Electronic Product Manufacturing
- We believe we need to provide incentives for U.S.-based manufacturing, especially small business.
- Business is stable to improving slightly. Not hot, but good.
Food Manufacturing
- Our export business has slowed significantly due to the high value of the U.S. dollar. The lower cost of energy is helping decrease production and transportation expenses.
Wood Product Manufacturing
- So far, the downtrend in oil production (and related employment) has not translated into reduced construction.
Paper Manufacturing
- So far business has been steady and a little behind the January 2014 level.
Printing and Related Support Activities
- We have unleashed the hounds of capital spending, finally. We are transitioning to newer, more productive technology while expanding capacity. Hiring will go flat once the new equipment is in (for the past year we’ve been increasing throughput by throwing labor at it), as less labor is required for higher unit output.
Electrical Equipment, Appliance, and Component Manufacturing
- Our business new orders, volume, capacity, inventories and so forth are heavily influenced by large project construction work overseas, principally in Asia and the Middle East. We see this continuing and are waiting for the U.S. market new construction to pick up meaningfully.
Miscellaneous Manufacturing
- We are being bogged down by regulatory issues and tax planning that is taking critical resources away from growing the core business. We expect it will take at least six months to work through issues associated with having over 50 employees, more intense regulation in general, high costs with no increase to revenue, and being in a highly regulated industry. Regulation seems to stifle innovation and benefit the biggest companies in the industry at the expense of smaller and younger firms. We will consider selling to a larger firm if we can’t work through nonbusiness issues due to not being able to focus on our vision and serving our customers.
- The West Coast labor problems in off-shore shipping are hurting our cash flow, inventory and labor hours. This may aid in some more manufacturing being returned to the U.S.
