Don’t say that 'R' word

I've sort of been waiting for this, and Bernard Condon, AP Business Writer, beat me to it on Manufacturing.net with his headline, "Could The U.S. Dip Into Recession?"

The BRIC nations, which many—especially in Europe—expected to be a driving force in manufacturing, haven't delivered. Brazil may be the biggest disappointment because it has all the infrastructure to be a manufacturing powerhouse. Maybe their obsession with the  World Cup and now the Olympics overwhelmed the economic difficulties that are hampering companies from investing in new equipment to make the next move up in production capability. Russia is a mess, thanks to its combative posture in the Ukraine that has turned the rest of the world against it by invoking stringent economic sanctions that are hurting manufacturing. China is a conundrum hiding in a golden egg. A vast manufacturing base (the egg) is poised to inundate the world with domestic IP products that the government is endorsing (funding) to make the country the global economy leader. Problem is that you can't turn on IP overnight, although one or two Chinese laser system suppliers have sent me PR on just such products. And finally, like a broken record, that potential massive market in India may be perking up, with the growth of the domestic auto industry tempting high-power laser suppliers.


Japan, riding a wave of nationalism, is being tempted to sell defense products, but conservative citizens are concerned and the Prime Minister seems ready to back off just when Japanese industry seemed to see a spurt of business on the horizon.

The hoped-for contribution from the Asean nations petered out, with regional politics and internal squabbling diminishing the posture of a low-labor-cost alternative to China.

In Europe, Italian machine tool makers have tossed in the towel on growth for 2014 and are pinning their hopes on a slight increase in sales in 2015. Spain and France, two necessary-for-growth industrialized nations, are not contributing—France because they can't decide if they want to be a service economy, and Spain because internal politics is stultifying expanding investment in capital equipment.

Finally, Condon trots out the oft-used in the past cliché "When the US sneezes, the rest of the world catches a cold." Only he flips it and, citing US exports' support on declining manufacturing economy growth, suggests the world is now sneezing. US manufacturing experienced three months of decline over the first six months of 2014 and the machine tool industry anticipates a soft first half, followed by a stronger second half. Much of the decline is attributed to a sharp fall-off in defense spending and reduced exports to the above-referenced nations.

Is it time for a gesundheit?



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