ECONOMIC GROWTH TO CONTINUE IN
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1 ECONOMIC GROWTH TO CONTINUE IN 2008 Andrea Waas, APR Vice President, Business & Public Relations, Tempe, Arizona 800/ , ext ECONOMIC GROWTH TO CONTINUE IN 2008 Manufacturing Growth Expected in 2008 Revenue to Increase 6.8% Capital Expenditures to Increase 0.7% Capacity Utilization Currently at 82.9% Non-Manufacturing to Maintain Growth Revenue to Increase 2% Capital Spending to Decrease 6.3% Capacity Utilization Currently at 86.4% Expectations for 2008 are at a higher level for the manufacturing sector than the non-manufacturing sector. The non-manufacturing sector is projecting moderate growth. The manufacturing sector has a higher level of optimism about 2008, with revenues expected to grow more than in the non-manufacturing sector. These projections are part of the forecast issued by the Business Survey Committee of the Institute for Supply Management (ISM). The forecast was released by Norbert J. Ore, C.P.M., chair of the ISM Manufacturing Business Survey Committee, and group director, strategic sourcing and procurement, Georgia-Pacific LLC; and by Anthony S. Nieves, C.P.M., CFPM, chair of the ISM Non-Manufacturing Business Survey Committee and senior vice president supply management, Hilton Hotels Corporation. (Continued next column) Manufacturing Summary Expectations for 2008 are high as 62 percent of survey respondents expect revenues to be greater in 2008 than in The panel of purchasing and supply executives expects a 6.8 percent net increase in overall revenues for 2008, compared to an increase of 2.4 percent reported for Manufacturing industries expecting the greatest improvement over 2007 listed in order are: Computer & Electronic Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Miscellaneous Manufacturing*; Fabricated Metal Products; Food, Beverage & Tobacco Products; Textile Mills; Paper Products; and Printing & Related Support Activities. Non-Manufacturing Summary Fifty-four percent of non-manufacturing supply management executives expect their 2008 revenues to be greater than in They currently expect a 2 percent net increase in overall revenues for 2008 compared to a 1.3 percent increase reported for Non-manufacturing industries expecting the greatest improvement over 2007 listed in order are: Agriculture, Forestry, Fishing & Hunting; Construction; Other Services**; Retail Trade; Wholesale Trade; Real Estate, Rental & Leasing; Utilities; Transportation & Warehousing; Finance & Insurance; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Information. (Continued next page) January s MEETING Thursday January 10, 2008 Topic: Economic Forecast Neil Fried See Page 4 For More Information TIME: 5:30 p.m. Networking / 6:00 p.m. Program Cost $20.00* Including Dinner. VISA and MasterCard Accepted No-Shows Billed Location: Coast International Inn, Anchorage 3450 Aviation Avenue, Anchorage RESERVATIONS REQUIRED Contact Dave Williams, C.P.M. (907) daveyjt@gci.net by noon on Tuesday, January 8, 2008
2 ALASKAN PURCHASER OPERATING RATE Manufacturing Manufacturing purchasing and supply executives report that their companies are currently operating at 82.9 percent of normal capacity. This is a slight increase when compared to April 2007 (82.8 percent) and less than the rate reported in December 2006 (84.5 percent). Recent monthly data from the Manufacturing ISM Report On Business indicates the manufacturing sector is in its 10th month of growth in November The following nine industries are operating at or above the average capacity of 82.9 percent: Paper Products; Textile Mills; Chemical Products; Miscellaneous Manufacturing*; Petroleum & Coal Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Computer & Electronic Products; and Primary Metals. Non-Manufacturing Non-manufacturing supply executives report that their organizations are currently operating at 86.4 percent of normal capacity. This is higher than the 84.4 percent reported in April 2007, and slightly higher than the 86.3 percent reported in December Considering production capacity increases reported in the following section of this forecast, this indicates that non-manufacturing industries are continuing to add capacity, but also find it necessary to maintain their utilization of capacity at a relatively high level. The following industries are operating at or above the average capacity level of 86.4 percent: Information; Mining; Utilities; Public Administration; Real Estate, Rental & Leasing; Educational Services; Finance & Insurance; Retail Trade; and Transportation & Warehousing. Manufacturing The manufacturing sector is currently expanding, and is forecasted to continue to expand in Operating rate is 82.9 percent. Production capacity increased by 8.3 percent in Production capacity is expected to increase by 11.3 percent in Capital expenditures increased 18.2 percent in Capital expenditures are expected to increase 0.7 percent in Prices paid increased 4.6 percent in Overall 2008 prices paid are expected to increase 4.3 percent. Labor and benefit costs are expected to increase 2.5 percent in (Continued next column) PAGE 2 Employment is expected to increase 1.6 percent. Expect strong growth in U.S. exports in Expect strong growth in U.S. imports in Manufacturing revenues (nominal) are up by 2.4 percent in Manufacturing revenues (nominal) are expected to be up by 6.8 percent in Concerns to manufacturers: energy cost and supply; weak dollar; inflation; housing; and commodity prices. The U.S. dollar is expected to weaken on average versus major trading partner currencies in Overall attitude of manufacturing management: optimistic, with 75 percent of respondents predicting 2008 will be equal to or better than Non-Manufacturing The non-manufacturing sector should expand in Operating rate is currently 86.4 percent. Production and provision capacity are expected to increase 2.3 percent in Capital expenditures increased 12.3 percent in Capital expenditures are expected to decrease 6.3 percent in Prices paid increased 3.4 percent during Prices paid are expected to increase 4 percent in Labor and benefit costs are expected to increase 3 percent during Non-manufacturing employment is expected to increase 0.5 percent during Expect strong export growth in Expect strong import growth in 2008, although at a slower rate than in Non-manufacturing revenues (nominal) are up 1.3 percent in Non-manufacturing revenues (nominal) are expected to rise 2 percent in Major concerns to non-manufacturers: high energy, fuel and transportation costs; inflation; interest rates, exchange rates and devaluation of the dollar; health care, labor and benefits costs; housing and credit markets; and price increases. The Manufacturing and Non-Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management. The Institute for Supply Management, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education.
3 ALASKAN PURCHASER 2007/2008 Officers President Marlys Hagen, C.P.M. State of Alaska, Department of Natural Resources Phone (907) fax (907) Vice President Annie Messer, C.P.M. State of Alaska Dept of Public Safety Phone: (907) ext 226 fax Secretary Sonja Love-Hestnes State of Alaska Phone (907) fax (907) Treasurer Dave Williams, C.P.M. Army Corps of Engineers (907) Director of National Affairs (DNA) Jerry Crocker, C.P.M. Fort Richardson Phone (907) fax (907) Director of Education Ben Milam, C.P.M. State of Alaska, Division of Gen. Services Phone (907) fax (907) Director of Membership Katharine A. Wall Northrim Bank Phone (907) fax (907) Director of Communications Mike Lankford Elmendorf Air Force Base Phone (907) fax (907) Director at Large: Mary Judd AIDEA/Alaska Energy Authority Phone (907) fax (907) Jim Cohen Elmendorf AFB AK Phone: (907) fax (907) Robert D. Collins, C.P.M. ConocoPhillips Alaska Phone (907) fax (907) Pamela K. Chenier Anchorage School District (907) fax (907) PRESIDENT S MESSAGE Marlys Hagen, C.P.M., President Happy New Year Everyone!! As I m writing this it is about a week before Christmas and I am sitting in the airport waiting to board my flight to Juneau. However, by the time you read this the holidays will be about over and we will be wishing for spring. But its all downhill from here (or uphill depending on how you look at it) we ve now had our darkest day of the year!! For those of you who missed our December meeting and holiday party, you missed a unique event. Mr. Whitekeys entertained us and sufficiently roasted some of the attendees with quips about newsworthy items those folks were or are associated with. It was all in great fun, of course. This is the one meeting of the year when we divert from professional development and have fun. At our meeting we also had some great door prizes donated by some of our member companies. We owe a big thank you to ConocoPhillips, Alaska Railroad, Northrim Bank, Arctic Office Products, and Julia Milam, the wife of Ben Milam, our Director of Education, for their generous donations of door prizes. In January we will have Neil Fried from the Alaska Department of Labor and Workforce Development come and talk to us about the economic forecast for Alaska for the near future. This has become somewhat of a tradition for us for January or February. Don t miss this meeting. Neil always has some interesting insights into why our economy is doing what its doing and who or what is likely to drive our economic growth in the upcoming year, and how it will affect all of us. If you ve been at meetings and reading our newsletter, you know that we have embarked on the process of trying to qualify under ISM s Affiliate Excellence Program. We took another big step toward that goal at our last Board meeting by approving our new NAPM- Alaska Marketing and Strategic Plan. You ll see some new things come about as we try to implement our plan to meet our goals and objectives. As always, if there s anything NAPM-Alaska can do to help you be more successful, please contact one of your board members. We are always looking for new ideas. Marlys Hagen, C.P.M. President PAGE 3
4 ALASKAN PURCHASER Educational Offerings Ben Milam, CPPM, C.P.M., Director of Education Someone once told me that purchasing was dull. They should have been at our Christmas party. I am usually the one harping that our speakers must provide for education and professional development, but it sure was nice to kick back and just have fun. Some may remember that we had scheduled our Christmas Party last year at Mr. Whitekeys Fly By Night Club, but the club closed just a month prior to our event, This year Mr. Whitekeys came to us. Twenty four hours prior to the event, Mr. Whitekeys had no idea who was coming to our party. It is hard to believe that he was able to dig up so much on members of our profession in such a short time. Admittedly he may have stretched some of the events just a little, but it was great fun. Mr. Whitekeys kept us laughing for almost an hour and even stayed around to help MC the Chinese Auction. As usual that was a great event with some great gifts. Thank you Mr. Whitekeys for a fantastic evening. As usual we also had some great door prizes. We owe all of the donors a big round of thanks, but for fear of forgetting someone, I leave the names up to our President. Look for the list in her article and make a point of saying thanks to each of them. I think I like this party stuff. There s Valentine s Day in February; what can we use for a party excuse in January? January 10, 2008 Pro-D Meeting: That party stuff was fun, but it is time to get back to professional development (Someone has to be Mr. Grinch) Fortunately we don t have to give up the fun part. Mr. Neil Fried has graciously agreed to present his annual economic forecast and in case you don t remember he has a very unique talent and the ability to make economics fun. It is sure not the way I remember economics class in school. He makes it fun, but presents information we all will need as purchasing professionals during the coming year. ISM S CPSM PILOT EXAMS CPSM Exam 1 date: February 18, 2008 CPSM Exam 2 date: March 3, 2008 CPSM Exam 3 date: March 31, 2008 SAVE THE DATE! 65 th Annual Pacific Northwest Purchasing Conference: Next years Conference will be in Kennewick, Washington, October 23-25, That group always does a great job and I expect this year will be even better that previous years. By the time you get this, Christmas will be over, though you may still be carrying evidence of that great Christmas dinner. I hope you had a very Merry Christmas and a great New Year s party. SEE YOU NEXT YEAR!! BEN PAGE 4
5 ALASKAN PURCHASER MEMBERSHIP REPORT Kat Wall, Director of Membership Seasons Greetings ~ As I sit and write my December newsletter article, it is raining right now. Not only is a white Christmas probably out of the question, it would take a Miracle on Spenard to make it happen. For those of you who were unable to join us for our annual Christmas party, you really missed a treat. Mr. Whitekeys did a hilarious presentation on the joys of procurement! While the gift exchange was fun, I think everyone walked away from a truly entertaining evening!! This is also the time of year when membership renewal invoices are due. Please continue to fax them into (this is a secure fax) and indicate if a receipt is needed. There may be a week or so delay in the processing of your credit card. NO NEW MEMBERS TO WELCOME THIS MONTH As we enter a new year, I d like to take a moment to wish everyone peace, happiness and good health. As a nation, we are very blessed. Please continue to pray for those less fortunate and for the safety of our men and women who are serving in our Armed Forces. However you celebrate holidays, I hope you have safe and happy one!! DIRECTOR NATIONAL AFFAIRS Jerry Crocker C.P.M., DNA February & March, 2008 CPSM Pilot Exam Testing (Contact Ben Milam) Jerry Crocker C.P.M. DNA Thank-you to the following corporations, agencies, and individuals for their generous donations of Christmas Party door prizes: Alaska Railroad -Roundtrip train tickets to Denali -Poster and Pens -Waterproof Scrunch Bags Conocco-Philips Floral Arrangements Northrim Bank Travel Coffee Mug Sets Arctic Office USB Pen w/thumb Drive Julia Milam Decorative Light Thank-you for helping to make our Christmas Party a success! Happy Holidays, Sonja Love-Hestnes Secretary, NAPM-ALASKA Happy Holidays - Kat PAGE 5
6 National Association of Purchasing Management - Alaska Inc. PO Box Anchorage, AK WHAT S HAPPENING! WHAT S INSIDE 10 JANUARY 2008 ECONOMIC FORECAST PAGE 1& 2 PAGE 3 PAGE 4 ECONOMIC GROWTH PRESIDENT S MESSAGE EDUCATION NEWS NEIL FRIED Coast International Inn, Anchorage, Alaska PAGE 5 MEMBERSHIP REPORT / DNA The Alaskan Purchaser is published monthly (September to May) by NAPM-Alaska, Inc., an educational organization committed to providing purchasing and material management practitioners the opportunity to enhance their professional skills and knowledge. If you have an item you would like to contribute to the newsletter, please contact: Mike Lankford Phone (907) fax (907) michael.lankford@elmendorf.af.mil
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