U.S. Manufacturing Has Grown for 31 Consecutive Months

March 2019 US Manufacturing Growth Tuesday Tidbit by Rivet MRO Industrial Distributor Marketing Agency and Co-op Marketing Consultant.png

From Industrial Supply Magazine:

U.S. manufacturing expanded in March after a decline in February, according to the Institute for Supply Management.

ISM's monthly index registered 55.3 percent in March, an increase of 1.1 percentage points from the February reading of 54.2 percent.

“This indicates growth in manufacturing for the 31st consecutive month. The PMI reversed a February expansion decline primarily through improved growth in employment and, to a lesser extent, new orders,” said Timothy R. Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee.

A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

U.S. Manufacturing Productivity Rose 2% in 4th Quarter of 2018

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According to Industrial Supply Magazine, the manufacturing sector labor productivity increased 2.0 percent in the fourth quarter of 2018, as output increased 2.7 percent and hours worked rose 0.8 percent.

The U.S. Bureau of Labor Statistics reported today that productivity increased 3.3 percent in the durable manufacturing sector and 1.9 percent in the nondurable manufacturing sector in the fourth quarter of 2018. Over the last four quarters, total manufacturing sector productivity increased 1.0 percent, as output increased 2.9 percent and hours worked increased 1.9 percent. Unit labor costs in manufacturing increased 2.2 percent in the fourth quarter of 2018 and rose 0.8 percent from the same quarter a year ago.

10.5 Quick Tips to Help You Claim More Co-op Marketing Funds!

10.5 Co-op Marketing Tips for Independent Industrial Distributors Tuesday Tidbit by Rivet MRO Industrial Distributor Marketing Agency and Co-op Marketing Consultant.png

Rivet|MRO was featured in the March/April edition of Industrial Supply Magazine article, Stop Throwing Money Away.

Here’s the text of the story:

STOP THROWING MONEY AWAY

by Tim Rasmussen

What if I told you that your distributorship intentionally threw away a $30,000 check every year? That’s if you’re lucky. Chances are, the check your distributorship is throwing away is bigger. Much bigger.

The average independent industrial distributor with $30 million in revenue is probably missing out on more than $50,000 in co-op funds. That’s like throwing away $50,000 every year that could have been invested in growing your business.

How much product would you have to sell to earn $50,000 to spend on marketing? It’s around $1.6 million (if your distributorship nets out at 3 percent pre-tax profit, as most do, that would be the profit generated from $1.6 million in sales).

How much effort would you put into a $1.6 million sale? How much effort do you put into claiming co-op marketing funds?

Co-op marketing funds are an overlooked treasure trove that can fuel new sales growth. Most distributors don’t pursue co-op funds because the process is complicated and time-intensive; every manufacturer has different rules and the claims process can be overwhelming. Then there is the issue of resources for program design and execution—so most distributors don’t even try to maximize their co-op. They just settle for a few pieces of low-hanging fruit.

For those who diligently seek to maximize co-op, however, the rewards can be great. And, it’s not too late in the year to start the process. Here’s a quick primer on 10.5 simple things you can do to start claiming more co-op marketing funds.

1) Keep track of your manufacturer contacts—you’d be shocked at the number of distributors who don’t have ready access to names, phone numbers and email addresses for key contacts. You can’t claim co-op funds if you can’t find someone to approve the request.

2) Make sure your sales team has a voice in the process. Before you start planning, talk to your sellers and find out what tools they need to improve their performance. Ask them what kinds of promotions work with your customers. Document their wish list and refer to it as you develop your funding requests. And there’s a bonus benefit: when your sales team has a say in the planning, they have a greater buy-in when it comes to execution!

3) Ask your manufacturers for co-op program details and save them in a single co-op file. Having the co-op program rules in-hand makes planning their use much easier.

4) Involve the manufacturer in the planning process. Learn about their priorities that align with yours. Meet early in the year. The earlier you engage, the better. Some manufacturers won’t approve requests late in the year.

5) If your manufacturers don’t have formal co-op programs, ask them if they have informal programs. How do they determine budgets? What types of initiatives do they prefer to support? Make sure your requests reflect this input.

6) Be prepared to demonstrate how you will drive and track co-op program results. Manufacturers are more willing to support co-op marketing projects that will provide a return on investment.

7) Demonstrate how you will apply your co-op support to strategic initiatives that are in alignment with the manufacturer’s key focus(es). If a manufacturer sees linkage between your co-op request and their key initiatives, there is a higher likelihood your request will be funded.

8) Develop an overarching marketing positioning strategy. Marketing is about telling compelling stories—what’s yours? What makes you better and different? Understand that and make it come to life in your co-op marketing programs.

9) Ask about Market Development Funds—they are often separate from co-op funds. These kinds of funds might be available when the manufacturer has an important new product launch or asks you to pursue a new market for their products.

10) Don’t let your internal resources drive your co-op planning strategy. Find external resources to help you find, claim, manage and use your co-op funds. Just because you don’t have internal video production resources, for example, that doesn’t mean you shouldn’t pursue video co-op projects.

10.5) Commit to the plan. Maximizing co-op funds is about perseverance. Get organized and remain focused. Follow-up regularly with your manufacturers, especially your bigger ones.

Still daunted by the complexity of co-op? Don’t be. Where else can you get free money to grow your business?

Tim Rasmussen is the founder of Rivet|MRO, a marketing consulting firm that focuses exclusively on independent industrial distributors. One of the firm’s major services is its Co|optimizer co-op maximizer program. Rivet|MRO also provides strategic marketing consulting, marketing analytics, distributor-specific syndicated social media management, and traditional resources of a full-service agency. For more information, visit www.co-opMAXIMIZER.com and www.rivetMRO.com.

December Orders of Manufactured Goods Almost Reach $500 Billion

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According to Industrial Supply Magazine, new orders for manufactured goods increased $0.3 billion, or 0.1 percent, to $499.9 billion in December.

The increase followed a 0.5 percent November decrease.

New orders for manufactured durable goods increased $2.9 billion or 1.2 percent to $254.1 billion. New orders for manufactured nondurable goods decreased $2.6 billion or 1.0 percent to $245.8 billion.

Shipments decreased $0.9 billion or 0.2 percent to $504.9 billion after falling 0.5 percent  in November. Unfilled orders decreased $0.9 billion or 0.1 percent to $1,180.3 billion. 

Inventories decreased $0.1 billion or virtually unchanged to $681.5 billion. This followed a 0.1 percent November decrease. The inventories‐to‐shipments ratio was 1.35, unchanged from November.

Click here to see the US Census Bureau report.

U.S. Manufacturing Technology Orders Increased by 19% in 2018

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According to a recent Industrial Supply Magazine article, U.S. manufacturing technology orders rose by 19% last year, with $5.5 billion in total orders.

December orders of $443 million were down two percent from November and six percent from December 2017. The November to December drop was only the fourth time in the program’s 23-year history that a year didn’t end with an uptick in orders from November.

Manufacturing Productivity Rose 1.3% During 4th Quarter of 2018

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According the US Bureau of Labor Statistics, the manufacturing sector labor productivity increased 1.3 percent during the fourth quarter of 2018, as output increased 2.3 percent and hours worked increased 1.0 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.)

From the fourth quarter of 2017 to the fourth quarter of 2018, manufacturing productivity increased 0.7 percent, reflecting a 2.8-percent increase in output and a 2.1-percent increase in hours worked.

Click here for more detail.

3 Reasons to See a Silver Lining in the Slowing Economy

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According to Brian Beaulieu, CEO of ITR Economics, there are actually three reasons to see a silver lining in the economic slowdown he expects to happen in the US this year:

  1. Interest rates in general will likely level off/decline

  1. The cost of carrying the national debt will abate in 2019

  2. Housing affordability will likely temporarily cease to be a growing problem

The post provides an overview of ITR’s reasons for predicting the slowdown and some other benefits from the trend.

Click here to see the full ITR blog post.

Industrial Distributors Predict 4% Growth in 2019, According to Baird Survey

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Industrial Distributors surveyed by Baird think they will continue to grow in 2019, albeit at a slower pace of 4% vs 5.9% last year.

Here are some of the highlights of the 2019 Distribution Industry Outlook:

  • 2018 Q4 revenues were up 5.9%, 2019 Q1 outlook is +4.1%

  • General MRO was up 6.8% in 2018

  • Metalworking/Cutting Tools was up 5.9%

  • Safety was up 7%

  • Industrial Supply pricing was up 2%

  • Fasteners were up 4%, expecting continued increases in 2019, especially if tariffs go up to 25%

Expected 2019 trends:

  • Industrial Supply outlook for 2019: up  4% (decelerated growth)

  • Safety: +3.8%

  • OEM Fasteners: +3.4%

  • General MRO: +4.0%

  • Facilities Maintenance/Jan-San MRO: +4.5%

  • Metalworking/Cutting Tools: +5.1%

  • Electrical: +4.0%

Click here for the MDM article on the survey.

Click here to access a recording of the webcast.