@Risk

Economic uncertainty in the EU is leading European manufacturers to scale-back operations, investment projections and optimism.

In fact, recently released Q3 ’11 results of the MFGWatch Quarterly Survey of North American & EMEA Manufactures show that:

• Only about one-third (35 percent) of the European supply-side manufacturers polled reported business growth in Q3’ 11 –that’s down from 44 percent in Q2.
• About the same amount (34 percent) of suppliers said their businesses have contracted –that’s nearly double the 18 percent who reported contraction in Q2.
• Buy-side manufacturers in Europe aren’t faring any better. Sourcing manufacturers in the EU reported growth in their businesses fell from 44 percent to 27 percent in Q3’11. Buy-side manufacturers indicating contraction rose from 16 percent to 30 percent over the same period.

In addition, the survey found that both buy-side and supplier manufacturers in Europe are hiring less and laying off more employees. Among supply-side manufacturers, 13 percent fewer added jobs, while another 13 percent more shed jobs (20 percent, up from 3 percent in Q2’11). Sourcing manufacturers also saw employment dwindle – with 27 percent adding jobs (down from 31 percent) and 18 percent decreasing payroll (up from 9 percent in Q2’11).

What’s more, as MFGWatch points out, perhaps the most telling results that point to the worsening European economic conditions are: (more…)

Rising labor costs and quality concerns have many US companies reevaluating their overseas strategies.

In fact, new research conducted by Cook Associates Executive Search found that a full 85 percent of manufacturing executives see the possibility of  certain manufacturing operations returning to the US.

What are the reasons for this potential shift? Survey participants cited:

• overseas costs (37 percent)
• logistics (19 percent)
• other, including economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for highly technical manufacturing processes (36 percent)

The study, which polled nearly 3,000 manufacturing executives primarily in small- to mid-sized US companies from October 13 through November 18, 2011, identified low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation as the primary forms of manufacturing returning to the US. (more…)

Results of the 2011 Change in the (Supply) Chain survey show that many Japanese high-tech companies are shifting supply sourcing locations from domestic to other Asian countries, such as South East Asia.

More specifically, the survey, which was conducted by IDC Manufacturing Insights and commissioned by UPS, revealed that:

• The Japanese companies interviewed expect to reduce their domestic supply sourcing by nearly half, from 96 percent to 53 percent in the next three to five years.
• These companies also expect to increase sourcing from Mature Asia Pacific Countries (Thailand, Malaysia, Hong Kong, and Singapore) almost threefold, from 9 percent to 24 percent.

The key concern appears to be cost management. More than two-thirds (68.9 percent) of the Japanese companies surveyed cited “reducing total supply chain costs” as the top supply chain priority in the past years. Not surprisingly, cost is also expected to remain one of the top drivers of change in the supply chain in the next three to five years. (more…)

After several down months of retailers reducing their imports compared to last year, we’re likely to see a (slight) turnaround in December.

The monthly Global Port Tracker report, released last week by the National Retail Federation (NRF) and Hackett Associates, forecasts that import cargo volume at the nation’s major retail container ports should increase 0.3 percent this month compared to December 2010.

Global Port Tracker covers the US ports of Long Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast, New York/New Jersey, Hampton Roads, Charleston and Savannah on the East Coast, and Houston on the Gulf Coast. It records retail container traffic in Twenty-foot Equivalent Units (TEU), where one TEU is one 20-foot cargo container or its equivalent.

Here is the volume these ports have handled over the past few months: (more…)

The semiconductor industry heard some welcome news last week.

Despite a challenging global economy and natural disasters that impacted production in Asia, the Semiconductor Industry Association (SIA) said it expects continued growth in 2011, 2012 and 2013.

More specifically, the SAI endorsed the World Semiconductor Trade Statistics (WSTS) organization’s Autumn 2011 global semiconductor sales forecast which has projected semiconductor sales to grow to $302 Billion for 2011. If that forecast holds, it will be the first time semiconductor sales have reached the $300 Billion mark and will represent a 1.3 percent growth rate over the record-breaking year in 2010.

WSTS tabulates its annual forecast by convening an extensive group of global semiconductor companies that provide accurate and timely indicators of semiconductor trends.

Beyond 2011, the WSTS expects steady, modest growth: a 3.7 percent increase for 2012, and 5.8 percent increase for 2013. (more…)