At IMTS optimism stems from diversity
What could dampen your mood as you walked into Chicago’s McCormick Place for the 2008 edition of IMTS, the International Manufacturing Technology Show? The US economy is in the pits as the combined ravages of high energy costs, a severely depressed housing market with its fallout felt by numerous manufacturing industries, the electioneering speeches of the two presidential candidates who both have lengthy lists of what is “wrong with America,” and the final blow a slump on Wall Street from the mortgage business that presaged further bad news for investors. I have to confess, I wasn’t in the greatest of moods as the first day of the show began.
After one day, and visiting only one aisle in the laser pavilion, my attitude brightened as the prospects for the industrial laser business in the coming months were noticeably positive. Now I grant you that, by a quirk in the show floor layout, we mostly saw laser marking systems suppliers on the first day. But this is the largest (in terms of units) application for industrial lasers, so the health of this sector is critical to the overall laser economic situation.
Subsequent days at the show and visits to more than 50 suppliers, many showing products other than laser markers, substantiated the first day’s impression, and I left Chicago with a warmer feeling for near-term business prospects.
Now where is this optimism coming from? After all, the overall economic news for industry in the US is still negative. I’ve got a folder on my desk that is heavy with “bad” news from the manufacturing sector.
But from the dozens of interviews we conducted at IMTS, what’s clear is that the applications and industries served are so diverse and so subject to differing economic pressures—a situation that plagues marketing experts trying to plan selling campaigns—that the industrial laser market does not follow the trends seen by analysts.
At IMTS I learned of countless niche sectors that are doing very well, thank you, in an otherwise gloomy overall market. You would think that with several dozen companies competing for laser marking system business, prospects for success in a down market would be daunting. But I was pleased to learn that many of the four dozen big and small laser marking system suppliers I visited had carved out focused markets for their products even in the face of severe competition. Some are serving only a few specific market sectors and others are finding new markets (none of an earth-shattering size) that allow them to sell products at a fair price, enabling a profit. On the other hand, we noted a new trend—visible pricing of equipment in the booths, which led to the comment that the laser marking business was beginning to look like the used car business.
Overall there are certain segments in US manufacturing that are OK. Anyone exporting is doing nicely thanks to the weak dollar; the agricultural equipment sector is flat out trying to meet domestic and export demands; the medical device market, strong for years, is still a leading laser market; the food packaging industry and plastics markets are booming; aerospace, slow on the commercial side, is hot for military aircraft and engines; and the re-arming of the US defense sector is bringing lots of business to the metal fabrication producers.
So, if I can find one key word to explain the optimism we found among the IMTS exhibitors, it is “diversity” and the role this will play in supporting business in the first half of 2009. I’m looking forward to Fabtech this month to verify this.
David A. Belforte