Industrial Suppliers Report Rebound in Manufacturing
YOUNGSTOWN, OHIO – Despite a sluggish start to the year, orders from manufacturers are rising, an indicator that the regional manufacturing economy is beginning to pick up steam.
So say industrial suppliers in the region.
“We’re usually the last to slow down, and the last to pick up,” says Rick Jugenheimer, president of Jugenheimer Industrial Supplies Inc., Hubbard. “When manufacturers get going, we start selling.”
Business during the first quarter is slightly ahead of the same period last year, Jugenheimer reports, but some weak links in the local economy remain.
“We were tied into some of the oil and gas industry, such as Vallourec, and that part of the business is down. We’ve seen some different mills slowing down and some layoffs, but as long as they’re working 40 hours a week, it’s OK,” he says.
Jugenheimer provides a catalogue of more than 100,000 types of fasteners – “anything that has a thread on it, we sell,” he says.
These products are used for applications across the board in industries such as construction, steel, oil and gas, and aluminum. Moreover, the company provides custom machine services that can modify products specifically for a client’s needs.
“About 30% of our business is special order,” Jugenheimer says. “We partner with several machine shops that can turn it around pretty fast. We deal with local people who are good at it.”
Other suppliers agree that producers have begun to step up purchases, and there might even be some optimism in the oil and gas industry as prices – albeit slowly – continue to rise.
“It was conservative during the beginning of the year, but it’s starting to open up,” observes Anthony Pruszenski, president of TAP Industrial Sales LLC, based in Pulaski, Pa.
TAP sells products such as bearings, custom fasteners, screw machine parts and other engineered components for various industrial applications. Its two other sales lines include a painting and coating service and a direct marking service, he says.
“Some of my customers have had layoffs and are down to a skeleton crew, while others are doing fine,” Pruszenski says. “Those in the screw machine industry are doing well. Some tubing manufacturers are also doing good,” he adds.
One of TAP’s customers is Falmer Screw Products and Manufacturing Inc., Boardman, which manufactures screw products and other industrial components used in a variety of heavy industries. TAP provides industrial coatings for Falmer’s components.
“Right now, it seems like everyone is picking up a little bit,” says Rick Dravecky, president of Falmer.
“We make some high-performance products,” he notes, citing a recent order for fasteners that are bound for rail car parts used in door assemblies. “We’re doing pretty good.”
Last year, the company lost some business because of the downturn in the coal mining industry, Dravecky says.
“But, we were able to make it up and started the year strong with some solar panel work,” he reports. Even better, the coal mining company resumed placing orders, Dravecky adds.
Falmer Screw Products uses CNC machining equipment and some older lathes to manufacture screw products for various industries.
“We bring in 12-foot bar steel and we fabricate from there,” Dravecky says. “We‘ve got some very skilled people, and the trade schools are doing a great job of promoting the manufacturing field as a career choice.”
Falmer employs 12 at its shop on McClurg Road in Boardman.
Still, the rate of young people entering the industrial trades isn’t sufficient to keep pace with those who are retiring, he notes. “Skills and drugs are a big problem,” he relates.
Statistics show that fewer are employed in the region’s manufacturing sector today than last year, and employment levels are nowhere near their pre-Great Recession numbers of January 2006.
According to the latest data from the U.S. Bureau of Labor Statistics, in the Youngstown-Warren-Boardman metropolitan statistical area, which includes Mercer County, Pa., 29,100 people were employed in the region’s manufacturing sector in January 2016, 5.5% fewer than a year ago.
Layoffs at major employers such as Vallourec, which manufactures oil country tubular goods at its two plants in Youngstown, and the closing of Warren Steel Holdings in Champion, could have affected these numbers year-over-year.
Employment in the sector bottomed out in July 2009 in the wake of the throes of the Great Recession, when just 24,500 here held jobs in manufacturing.
While that picture has brightened, it’s still well off from employment levels of 10 years ago. In January 2006, the Bureau of Labor Statistics reports that local manufacturers employed 40,800 people. That means the region has 11,700 fewer people working in manufacturing today.
The reductions could be the result of several factors, including plant closings, but also a declining population and mass retirements and buyouts at major employers such as General Motors Co. in Lordstown and Delphi. And, it indicates that the manufacturing positions available aren’t being filled as quickly as in the past.
In January 2016, manufacturing jobs accounted for 14.7% of the total labor force in the area, constituting 15.8% of the total employed population, according to the BLS.
“The market here has evolved,” says Sharon Murphy-Dittrich, owner and president of Muscle Products in Jackson Center, Pa., in Mercer County. The company manufactures lubricants for industrial applications its customers use all over the world. “We’ve always been in the industrial sector.”
The spate of plant closings over the years, however, forced the company to rethink its business strategy as regional customers dried up, Murphy-Dittrich says.
“We were affected by that,” she says.
That led the company to market its products overseas, which it has done successfully. However, Murphy-Dittrich thinks it’s time to accelerate its marketing outreach to domestic customers again. “My goal right now is to raise awareness in the United States,” she says.
As of now, Japan is the largest distributor of Muscle Products’ lubricants. Other large customers are in Mexico, Turkey and Brazil; the company once had a presence in 68 countries.
American Industries in Sharon uses the company’s products, she reports, as does Russian steelmaker NLMK in Farrell, once the core of the former Sharon Steel Corp. “Anybody is a potential customer,” she says.
While many industrial suppliers found additional business in the oil and gas sector during that industry’s dramatic run-up in the Utica shale beginning five years ago, many also saw that business disappear as commodity prices started to tumble toward the end of 2014.
“It hurt us a little bit,” says Vic Coleman, general manager of Ray Lewis Co., Lisbon.
However, the company – in business since 1933 – had successfully diversified its customer base and trained its attention on the transportation market. “We’re seeing a good business in hoses of all kinds: trucking companies, hydraulics, chemicals, water,” he says.
Ray Lewis Co. has expanded its reach especially in the truck and trailer market this year, a strategy that has started to pay off during the first three months of 2016.
“We’ve seen considerable growth during the first quarter,” he says. “We’re gaining new customers and expanding sales with existing customers. I’m seeing the customer base starting to pick up.”
Pictured: Rick Dravecky, president of Falmer Screw Products and Manufacturing, and Anthony Pruszenski, owner of TAP Industrial Sales, display fastener components produced at Falmer.
Copyright 2022 The Business Journal, Youngstown, Ohio.