The fact that the U.S. economy has enjoyed 25 straight quarters of expansion is good on paper, but unfortunately that growth doesn't seem to be benefiting the manufacturing sector.
A number of rubber industry economists and company executives see projections of GDP growth in the 2 to 2.5 percent range, but say manufacturing is nowhere near that. Some reports even say the nation's manufacturing sector is in recession now.
Jordan Vickers, a senior economist for Eaton Corp., said the expansion coming out of the Great Recession has been the weakest in the U.S. going back the past half-century. Part of that is because the nation is coming out of such a steep downturn, but he also said there have been no game-changing technologies to jump start the economy.
Among the sectors being particularly hurt are the mining and oil and gas industries.
Vickers said the number of active oil drilling rigs dropped to 600 from 1,600 in just a year, a statistic those selling into the sector closely monitor. The oil and gas downturn impacts a wide range of rubber-related firms, from the large multinationals to the custom rubber shops. For example, Eaton's hydraulic sales to the oil and gas sector are off sharply, Vickers said, while small firms such as Houston-based Eutsler Technical Products are laying off staff to try to make ends meet.
ContiTech is another global conglomerate being affected by market conditions, with its hose business impacted by oil and gas and the conveyor belting segment suffering even greater pain because of bleak conditions in mining. The Continental A.G. business unit is reacting with plans to close a conveyor belt production site in Canada.
While the automotive and light truck market has remained strong, there are signs that even that bright spot may be near its peak.
Vickers said 2016 may bring a boost in housing starts to satisfy pent-up demand, and manufacturers may still benefit from low raw material costs. But the downside could hit hard, with building deflationary pressures, political tensions in the Middle East and the slowdown of the Chinese economy all potentially putting downward pressure on manufacturing.
So buckle up. The next year could be a bumpy ride.