Manufacturing Growth Up for 18th Consecutive Month

Guaranteed Painful Growth Without Employee Engagement

Jack Welch, former CEO of GE, said: “There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”

State of Manufacturing Growth: 18 Consecutive Months of Growth

Economic activity in the manufacturing sector expanded in November for the 18th consecutive month, and the overall economy grew for the 66th consecutive month, reported the nation’s supply executives in the latest Manufacturing ISM Report On Business.

The report was issued December 1st by Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management (ISM) Manufacturing Business Survey Committee. The November PMI registered 58.7 percent, a decrease of 0.3 percentage point from October’s reading of 59 percent, indicating continued expansion in manufacturing. The New Orders Index registered 66 percent, an increase of 0.2 percentage point from the reading of 65.8 percent in October. The Production Index registered 64.4 percent, 0.4 percentage point below the October reading of 64.8 percent.

The Employment Index grew for the 17th consecutive month, registering 54.9 percent, a decrease of 0.6 percentage point below the October reading of 55.5 percent. Inventories of raw materials registered 51.5 percent, a decrease of 1 percentage point from the October reading of 52.5 percent.

Of the 18 manufacturing industries, 14 are reporting growth in November in the following order: Food, Beverage & Tobacco Products; Miscellaneous Manufacturing; Furniture & Related Products; Fabricated Metal Products; Textile Mills; Printing & Related Support Activities; Electrical Equipment, Appliances & Components; Paper Products; Plastics & Rubber Products; Machinery; Transportation Equipment; Nonmetallic Mineral Products; Petroleum & Coal Products; and Primary Metals. The only industry reporting contraction in November is Apparel, Leather & Allied Products.

Painful Growth without Employee Engagement

Timothy R. Clark author of The 5 Ways That Highly Engaged Employees are Different said, “Highly engaged employees make the customer experience. Disengaged employees break it.” All the “good news” data above represents painful growth. After manufacturers survived the past five years of “economic recovery mode” the employee talent pool is limited, employees are aging-out of the workforce, and internal communication processes to create a company cohesive culture forces atrophied muscles to be exercised.  In some cases, internal communication, employee engagement, and collegial rapport were never a great strength for many manufacturers.

With significant new employee on-boarding due to the growth data referenced above, manufacturers are finding their constraint is in the workforce rather than in product development, manufacturing, and distribution. Ian Hutchinson, author of People Glue said, “Your number one customers are your people. Look after employees first and then customers last.”

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