In 2007 Ray MacNeil, a COMPOSITES 2010 general session speaker, left his job at PPG Industries, where he’d worked for 35 years, and began consulting. With a background in sales and marketing, strategic planning and business analysis, MacNeil does market research and development for a variety of companies within the composites industry. This experience also allows MacNeil to look ahead and forecast the economic future of the composites industry.
Is the recession over?
Yes. We hit bottom and in the middle of 2009 the economy began improving. Since then, the manufacturing and other parts of the economy have slowly started to improve and we seem to be moving up slowly.
Is there one segment of the industry that would be a good indicator of growth?
We look at manufacturing in the U.S. as a whole, which by and large is coming back. Certain segments have regained strength, especially over last few months; however the composites industry has yet to make a recovery. I’d say in the next few months we’ll see more growth within the composites industry as well. Within the composites industry there are some segments that have already started to see improvements, such as automotive that got a temporary shot in the arm with Cash for Clunkers. But now everyone is holding their breath to see if that growth is sustained.
Are there economic indicators people should watch?
I encourage people to look at the Purchasing Managers Index (PMI), the Index of Industrial Production (IIP) and the production statistics for key industries in the composites industry, such as housing, automotive and infrastructure.
It is also important to watch for consumer confidence to increase. Consumers represent 70 percent of the U.S. economy and their attitudes are closely related to the job situation. If the economy is still losing jobs, which it is albeit at a significantly slower rate, consumer confidence will remain lower than usual. I think we are only a few months away from going positive and once we turn the corner on the job market, people will resume purchasing.
Why the lag time for composites?
It’s a trickle effect and it often depends on where that segment of the composites industry is in the supply chain. Often times, composites aren’t an item or component needed in the early stages of a supply cycle.
In regards to economic production, where is the U.S. economy now?