ETM Manufacturing: Economic Outlook for Q2 – Part One

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MetalMiner recently took a look at manufacturers across the country and their economic outlooks for manufacturing for the year. We decided to follow up with Rob Olney, CEO of ETM Manufacturing in Littleton, Mass. — a metal fabricator with a $1-$2 million metal buy that supplies leading New England OEMs — to get his take.

How is your outlook for your business in 2012 different now than it was at the turn of the New Year?

I don’t think it has changed dramatically in the past three to four months. We know our solar energy customers were going to be slow in the first quarter, and — lo and behold — they were. Our business normally has a slow first quarter, but it’s a little bit better than what we had forecast. We’re pleasantly surprised with some of our new customers coming on board.

Are you still on track for your growth target of 20 percent this year?

With a slow first quarter, it’s hard with confidence to say we’re on track. We still have a number of good customers that continue to order from us. We have more opportunities in our pipeline now than we had in early January.

Can you attribute most of what you’re seeing to cyclical factors? Or are there new trends that jump out at you?

The solar slowdown is on-trend. Most of our solar customers in New England slow down in November, but [the solar market] stays pretty solid through the end of the year because of year-end incentives. Then it’s dormant for first three to four months of the year, and depending on the economy and new incentives, it’s either a bounceback or a slow comeback for them. We are seeing a significant increase in inquiries. Hopefully this will translate into new orders in the spring. The companies that are innovating, we’re seeing a lot of new products and designs from them, and that normally happens in April after Q1 finishes. We’re seeing a wake-up, but what we see from our customers in certain industries, it’s still a slow recovery.

What are some of the most important market indicators that you’re following?

They’ve shifted a bit. I used to keep an eye on raw material prices and how those are going to affect things. There’s also a lot of gossip — not soap opera gossip, but business gossip — that wages have held for three years now, and when the economy picks up, the best workers will be anxious to make a dent in their take-home pay. So wage inflation will increase. The trends I’m looking at include new housing builds, which spur major appliance demand — meaning aluminum and stainless demand. In terms of new things that I’m watching: I’ve been digging into fuel costs. They’re calling for a shortage in truck drivers. Logistics costs could be the next battleground on which we’ll be fighting.

Continued in Part Two. 

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