The other battle: the numbers. (Editor's Corner).

Most numbers battles you face usually concern "making" your numbers for production, quality or profitability. Understanding these numbers usually isn't much of a problem.

However, given the current economic conditions we operate in, there are different numbers that present themselves and the challenge to understand them. These are the numbers we, as individuals or even companies, have no real control over, but that have a direct impact on our operations or how we do business.

Leading the Industry News section of this issue of MAN is the report from the AMTDA, the American Machine Tool Distributors' Association and AMT - The Association For Manufacturing Technology detailing machine tool consumption (sales). This report presents the year-end figures. Initially, they don't look encouraging. These are also numbers we really have no control over as individuals. (However, if you have enough loose change laying around to buy enough machine tools to positively impact the numbers, please spend the money and make the entire industry smile.)

Surprising?

The report explains that machine tool sales were down almost 23% from last year, a year that wasn't exactly a banner year for the industry. To me this final figure of 23% was very surprising; I thought it would be worse.

It's not that I haven't been paying attention to the trend in machine tool sales that caused my surprise. I pay close attention to these numbers; they are very important to me as the have a direct relation to my continued employment.

The reason I thought the final number would be worse is another figure - approximately 20% - 25% of American manufacturing capacity is not being utilized. To me, non-economist that I am, if about 25% of the shops were not operating, it makes sense that that 25% would not be buying new machine tools. If this were true, the sales of new machine tools would be off by at least 25%.

I don't think I'm being Pollyanna or overly optimistic, but things could be worse. Perhaps I am looking at this like the kid who tries explain his "D" in Latin to his father by saying, "But Dad, it could be worse. I could have gotten an 'F' ." If I am, please tell me, as you always do.

Also contained in the machine tool report is some genuine good news in the form of numbers. Last December, machine tool sales were up 45.5% from November (2001) and up 18.1% from the total of $167.84 million reported for December 2001. This shows a strengthening in our industry's economic health.

Economic Bellwethers

Bolstering this position that things are improving are sales numbers for two types of products that may serve as economic bellwethers for the metalworking industry. These products are work holding devices and lasers.

Laser shipments for 2002 were down about 15% from the previous year, according to a recent AMT report. Although being down, again, it could have been a lot worse. A bit of good news contained in the report is that more than 80% of lasers shipments were as systems, not discrete components.

From the Workholding Product Group (WPG) of the AMT, comes the announcement that shipments of workholding products were also down for 2002, but only 10.3%. Richard Spooner, chairman of the WPG and CEO of PowerHold Inc., notes that these devices lead machine tool sales when coming out of an economic downturn. He also believes that the economic slide for the entire industry has bottomed out.

Mr. Spooner, I hope you are correct.