Commentary & Analysis
FREE: Friday's with Dr. Joe Webb
By WhatTheyThink Staff
Published: October 8, 2004
October 8, 2004 - Printing Shipments Up - Economic Round-Up - Miscellaneous Curiosities - Dr. Joe Speaks at Graph Expo - Economic Webinar Replay - Road Warrior Printing Shipments Up Printing shipments for August 2004 were up $21 million compared to August 2003. This is the third straight month of increase, unadjusted for inflation. We are now at -0.5% for the first eight months of 2004 compared to 2003. This is, of course, good news, and combined with the industry's improving profitability (keeping more out of each dollar of sales), this bodes well going into the last quarter of the year, and especially, next week's Graph Expo. This is the ranking of manufacturing industries by growth rate since January. Petroleum and coal products +35.6% Wood products +23.7% Primary metals +22.9% Machinery +15.0% Computers and electronic products +14.1% Durable goods industries +11.2% All manufacturing industries +11.1% Nondurable goods industries +11.1% Basic chemicals +10.5% Textile products +10.4%Fabricated metal products +10.1% Plastics and rubber products +9.4% Apparel +8.2% Furniture and related products +8.0% Paper products +7.9% Miscellaneous durable goods +7.0% Transportation equipment +6.9% Food products +6.1% Electrical equipment, appliances, and components +3% Textile mills +4.6% Nonmetallic mineral products +3.6% Beverage and tobacco products +2.5% Printing -0.5% Leather and allied products -3.4% On the Web Economic Round-Up The ISM Manufacturing Index retreated slightly on Friday, but I have to say that the report had more good news in it than reported in the business press, who focused on the top-line number. Prices are increasing (a sign of increasing demand and oil prices starting to affect underlying costs), inventories are rising (by choice and optimism, and not by slow sales), and more hiring is in process (at all levels). What slowed was the rate of new orders, but this was balanced somewhat by a slowdown in deliveries, as manufacturers are having trouble keeping up with demand. This implies to me that more hiring on its way as suppliers work to keep up with demand. The ISM’s Global Manufacturing Report indicates a loss of momentum in the rate of growth, stating “…the recent trend of the PMI suggests that the current upturn has already passed its peak, with the average reading for Q3 2004 (56.0) below that recorded for the second quarter (57.2 – a survey high).” A “sharp slowdown in Asia” was noted as well. The index still indicates manufacturing expansion. The ISM Non-Manufacturing Survey, showing an 18th month of sector expansion, declined slightly, but “new orders, employment, order backlogs, imports, prices, exports and inventories increased.” The press played this report negatively, of course. Globally, ISM service sector reports showed expansion, but the growth rates are slowing in Europe. Last week’s GDP report showed a slowing rate of consumer expenditures, while business activity was increasing. Overall, GDP for the second quarter was revised to an increase of 3.3%. Consumer spending has kept the economy going, and a brief pause is probably all it is, as recent housing numbers are still quite strong. Housing always is a sign of economic stimulation, and in this case, the demographics are so positive that it is likely it will continue to be a foundation for much of the economy, confounding experts. The August personal income report showed continued spending by consumers, except for autos and some other durable goods, but as housing continues to move positively, the durable goods will follow later. GDP has regularly been increased in its revisions, as the small business economy is tracked poorly by government statisticians and their models. The rate of growth in proprietor’s income is starting to pick up again, even while corporate cash flow growth is slowing. Corporations are spending their cash, but it still seems that big company CEOs are retaining their cautious ways; they just see too much risk internationally, so domestically-focused small businesses are picking up the slack and getting business from larger ones. On the Web: ISM manufacturing report ISM global manufacturing ISM non-manufacturing ISM global service ISM global private sector GDP report Personal income Miscellaneous Curiosities Ever wonder what standards like XML mean to the publishing and printing business? An excellent overview can be found in an article titled “Re-Engineering the Production Chain” On the Web For a comparison of the U.S. and European economies, a new book, Cowboy Capitalism, has been published by the Cato Institute, and is highly recommended. It’s by Olaf Gersemann, the Washington correspondent for Wirtschaftswoche, Germany’s largest economic and business weekly. On the Web: Read the press release Discussion with the author What’s up with “e-paper”? A brief summary can be found here I ran across a nice technology article called “Here's A Safe Bet: The Next Big Thing Is Already Here,” and its examples show how forecasting future scenarios is actually easier than forecasting the short term. The underlying message is to always be curious, seek out new things, and learn about them if you want to be a good manager and executive. On the Web The Webb Family’s worst summer vacation ever was at a resort in Vermont four years ago. Some resorts pretend to be resort hotels but they’re really not. This one wouldn’t qualify as a bad bus station with rooms. Pieces of plastic were in my food, the rooms were never vacuumed, trash was strewn about the property. When I negotiated getting more than half of our money back for our stay, I asked the question, “Has any of your staff stayed here for a vacation?” The president said to me, with a quizzical look, “Why?” I muttered, “Huh?” His shelf was full of binders from “team-building” seminars, just like other executives’ offices, and it seems that their team building did nothing but insulate them from what should have been their business: delighting customers and making them want to come back. What brought this to mind was an article called “Sometimes, You Just Don't Need Customer Data.” I know I harp on “eat your own cooking” to both vendors and printers, but this article drives it home. Over the years I have talked companies out of extensive satisfaction surveys. Why? If they need a survey to tell them that there are things wrong with their business, their problems run deeper than the managers know or are willing to openly admit to each other. On a practical note, by the time you measure what makes customers satisfied, it may be too late to fix the problem. And in the long run, you can have very satisfied customers but still have a declining business. You could be selling the wrong products because you did not take advantage of opportunities or work to cultivate new customers as the market changed, because your intense customer focus made you myopic to everything else. There’s always practical stuff you can do. Hire someone to call your company and ask for information, or call your tech support department with a problem. Better to make sure real people, not just sales and tech people, meet with customers regularly, especially in casual business circumstances conducive to frank exchanges. These will often help uncover problems earlier than any survey could. On the Web Dr. Joe to Speak at Free Graph Expo Event Sponsored by MAN Roland I have the pleasure of once again speaking at a free Graph Expo event sponsored by MAN Roland. The one hour event is entitled “Revolutionizing the Printing Industry”. It will offer printing and publishing executives direction and insights relative to the emerging economic, human and technology issues in today's challenging business environment. (And, most important to show attendees, free coffee). Topics will include: Is the print business turning around? And in what ways? New concerns that face executives, owners, and the industry The executive “to-do” list, designed to help break away from long-held myths and assumptions and look at the business in a new, creative way To sign up, visit http://members.whattheythink.com/home/geevent.cfm Economic Webinar Replay from Wednesday, September 29 The third quarter Dr. Joe/WhatTheyThink economic webinar was held on Wednesday, September 29th, from 2:00 to 3:00 PM EDT, sponsored by Kodak Polychrome Graphics. Among the topics discussed were Economic Update The new printing forecast-- is the turnaround real? Why is this different from all the other turnarounds? Capital equipment outlook going into GraphExpo To access the sound and presentation files for this webinar, go to here Road Warrior A new search engine based on work at Carnegie-Mellon is now available at www.clusty.com . It “clusters” your results and organizes them by topics, sources, or URLs. Rather than going through pages of results, this kind of organization allows you to go to the results that have things in common. I tried it a few times and it seems to do a good job of searching the Web, but is not yet up to Google standards for news or images. Searching on the phrase “printing industry” gave me this summary of results: publishing (39), association (28), screen printing (23), job (22), commercial (21), paper (20), ink (18), magazine (14), graphic arts (10), machinery (9), articles (9), chemical (10), textile (9), plate (9), prevention, pollution (7), book (11), printing services (8), printing industry information (6), profile of the printing industry (5), recycling (6). Tired of the settings in Microsoft Word always being changed on you by someone else’s documents or fiddling? Back up your normal.dot file with a different name. Then change the properties of normal.dot to read only (you can do this in Windows Explorer; right-click on the file name).