The stakes are high in the consumer products industry. Manufacturers are facing unprecedented challenges in the fast-paced and increasingly competitive environment. Succeeding in this market requires an intense focus on understanding and anticipating consumer needs and providing products at the right price points.
According to a new Standard & Poor’s report, there are two key indicators that will tell you what kind of shape the manufacturing industry is in.
The new 5G network is getting a lot of play in the press. The next generation of 5G networks will be 100 times faster than the current 4G networks. 5G networks do not have the latency issues of 4G networks and allow for a large amount of connections. The flexibility of this new technology has given many the hope that it can further support the Fourth Industrial Revolution.
Manufacturing has been through three industrial revolutions from the use of water and steam to electricity to automation. The next revolution involves connecting existing machines to one network. Appropriately, it has been dubbed the Fourth Industrial Revolution.
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According to a new Standard & Poor’s report, there are two key indicators that will tell you what kind of shape the manufacturing industry is in. The first is the Institute for Supply Management’s Purchasing Manager’s Index and the second is the Federal Reserve’s Capacity Utilization Index for motor vehicles and parts. A reading above 50 percent for the ISM index indicates that manufacturing is expanding in the US, and below 50 means that it is contracting. History shows that each time since 1983 that the index fell below 43 percent “speculative grade” automotive companies began to panic. Similarly any time the Fed’s utilization rate dropped below 72 percent during that period, it caused stress to automotive companies.