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Manufacturing’s Like the Weather: Marketers Should Look for Warming Trends

Posted on | April 27, 2010 | No Comments

This time of year it’s tough to decide what to wear. One day it’s warm; the next, it’s almost sub-zero.

The manufacturing ‘rebound’ seems to be following the same pattern: good news heats up, then cools down.  This week’s news from Caterpillar – where earnings exceeded estimates by 28% – helped shore up stock prices overall. However, sales are coming not from the US market but from countries in Asia/Pacific and Latin America.

A recent study from International Data Corporation (IDC) – Worldwide IDC Electronics Manufacturing Services (EMS) Market Forecast, 2009-2014: Beyond the Great Recession – estimates that the EMS industry will enjoy a compound annual growth rate of eight percent from 2010 to 2014. But expect periods of weakness into 2011.  Still, that’s better than 2009, when electronics manufacturing services contracted by eleven percent.

Many of the articles about the manufacturing climate talk about ‘consumer confidence’ and ‘business optimism.’  BusinessWeek reported on the US Conference Board’s survey of CEOs, which “registered a reading of 62 in the first quarter of 2010, down from 64 the previous quarter.” (A reading of >50 indicates more positive responses than negative.) 

The same BusinessWeek article stated that the “National Federation of Independent Business optimism index fell to 86.8 in March” – its lowest level since July 2009. The index has registered below 90 for 18 months – unprecedented in the survey’s history.

Optimism.  Contraction. Confidence. Unprecedented decline. What’s a marketer to do? 

I say: pack your rain gear, bring a parka, grab your suntan lotion and your sandals. Get a ‘get-ready’ attitude and prepare for better times.  Ninety percent of success is attitude.  Marketers need to be ‘optimistic’ – as well as realistic – about their ability to create a turnaround for their companies.  We know spring is coming; we might not know when.  You do a disservice to your company, if you don’t get prepared for better weather.

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