Manufacturing Sectors Keep U.S. Economy Going, PayNet Says
10 May, 2013
Signs of recovery within the manufacturing sector have been elusive; we've seen manufacturing hard hit by the recession and jobs eliminated. According to PayNet, the leader in small business analytics and risk management solutions, the state of U.S. Small Business Manufacturing is growing again by doing what it does best - inventing new industries and business processes.
“The process of re-invention and recreation is core to business right now and surviving companies have figured this out.”
The PayNet Manufacturing Index, which measures the amount of investment by small manufacturing businesses in property, plant, equipment, tools, and business units, is up 48% since 2009 – lead by the core Industrial Machinery & Equipment sector.
According to PayNet, the index for the Industrial Machinery & Equipment group, which builds gas compressors, carburetors, machine tools, and industrial fans, has fully recovered and grown to 102 points. “This sector is the biggest example of the resurgence of U.S. manufacturing,” states William Phelan, president of PayNet, Inc. “The process of re-invention and recreation is core to business right now and surviving companies have figured this out,” Phelan added. One example of re-invention is a small business which originally performed specialty metal fabrication and now cranks out 4,000 high tech diesel engine governors each year for a tractor producer.
Instruments producers are growing as a percent of all manufacturers, as the Instruments Manufacturing Index stands at 123 points. Instruments producers are embedding technology with a growing use of advanced sensors in gauges and monitoring systems. Electricity meters are more accurate today because they use digital sensors and they save energy consumption. They link with the internet to provide site monitoring and alarms as well as measure the power quality.
Transportation Equipment Manufacturing is also enjoying resurgence; these manufacturers are investing 12% more now than in 2006. Fuel efficient trucks represent a significant market that has filtered through to the small business manufacturers. The recovery of car parts, accessories and demand for aircraft parts is another big driver of investment in this segment.
The one casualty of progress is the Printing and Publishing sector of manufacturing which has lost 34% share of small business manufacturing. Printing and Publishing made up 17% of small business manufacturing in 2006 but now represent only 12%. With today's digital technology, bookbinding and metal plates manufacturing are out of date.
These investments are driving higher productivity The data shows that small businesses are producing more manufactured goods for the same level of capital. Production has increased 15% at the same level of investments.
PayNet's data takes the pulse of the U.S. Small Business economy and has proven to be a leading indicator of the GDP between 2-5 months. PayNet is the leading provider of credit ratings on small businesses enabling lenders to achieve optimal risk management, growth and operational efficiencies. PayNet maintains the largest proprietary database of small business loans, leases and lines of credit encompassing over 20 million contracts worth more than $1 trillion. Using state-of-the-art analytics, PayNet converts raw data into real-time market intelligence and predictive information that subscribing lenders use to make informed small business financial decisions and improve their business strategy.