Turning Green into Gold

Companies that invest in sustainability now are likely to reap dividends when the economy improves

Packaging Digest, 7/21/2009 10:21:00 AM

I’ve been ruminating about the tough economy like everyone else. Rather than lamenting what is, I think this downturn affords businesses a rare opportunity to slow down, rethink and reset.

Consumer product companies that innovate, will insulate their brands to a higher degree from the current downturn while positioning them for future growth. Tip: it’s time to research sustainability measures that can begin to be implemented—now. If there’s ever been a time and a place to allocate tight marketing budgets, this is it.

Why sustainability and why now? Sustainability practices are increasingly important to consumers. Interestingly, they have not pulled back from buying green, slow economy, decreased purchasing power, or not. That goes for products as well as packaging. Information Resources Inc. (IRI) recently released an informative report that CPG companies really need to take heed of, titled: “Sustainability: CPG Marketing in a Green World.”

With more and more consumers consciously choosing to live greener lives, sustainable product packaging is no longer an afterthought. Rather, it should be adopted and integrated as part of an overall brand repositioning in sync with an overall environmentally responsible plan. Company brand values need to be tweaked and realigned with today’s consumer values more than ever, if they are going to succeed over the long haul.

IRI’s report tracked consumer behavior in eight distinct demographic segments and the following green segments: organic, Fair Trade commodities, and eco-friendly products. While sales to hard-core eco-centric consumers fell 6.6% in 2008 largely due to price increases, “respectful stewards” increased spending on environmentally friendly products by 15.5% and “proud traditionalists” by 8.4%. This helped buoy sales up 4.1% for the year, signifying that previously less green consumers are climbing what IRI refers to as “the green adoption curve”.

IRI’s eight green consumer groups:

• Eco-centrics. “Green” is the chosen way of life for these consumers; they are well-informed, active and ardent supporters of green products.
• Respectful stewards. Idealistic, community-focused consumers who see value in paying more for products that are green.
• Proud traditionalists. Hard-working, family-focused consumers who focus on having environmentally-conscious homes and experiment with green products.
• Frugal earth mothers. Lower income female consumers who look for savings while also looking for more prudent, wholesome products for their families.
• Skeptics. Men who are highly educated and earn high incomes; who are also skeptical about the benefits of purchasing green products.
• Eco-chics. Young adult consumers who think being green is hip. They’ll buy on impulse; they’re early adopters but haven’t delved deeply into environmental issues.
• Green naives. Younger, lower income consumers who haven’t made the correlation between cause/effect and environmental responsibility.
• Eco-villains. Middle income male consumers; couldn’t care less about any environmental issues and dismiss environmental concerns outright.

The key for marketers is to understand which segments of consumers are prevalent within their own constituencies so that their companies can offer the right kind of innovations and messaging that is relevant to them. This will take some resource investments of time, capital and research on the part of the marketing department, but the returns are too important to ignore.

Green Packaging: Why Now?
There are few consumer goods that are 100% green, natural and organic, but there are more and more products with at least some components that are green, natural or organic. There is no such thing as 100% green packaging. However, that does not mean companies can’t make commitments now and into the future to conduct business as environmentally soundly as possible. Nor does it mean they cannot find innovative new ways to develop and integrate greener components in their products and packaging. Right?

Why would companies invest in this now, when budgets are getting slashed? Consider this: research demonstrates that while sustainable packaging isn’t the primary consumer purchase motivator, it has become important enough to make consumers opt for one brand over another within a product category if one company embraces good environmental practices and a competitor doesn’t.

The Hartman Group’s “Sustainability Outlook: The Rise of Consumer Responsibility” shares some significant findings concerning packaging attitudes in a recent survey among 1,600 consumers:

• The highest rating—75% of respondents stated the importance of packaging that could be recycled as most important to them.
• 71% indicated biodegradability in packaging an important asset.
• 67% cited packaging made from recycled content important to them.
• 63% like to purchase packaging that is refillable.
• 62% felt that minimal packaging was important.
• 60% of respondents look for packaging that can be repurposed for other uses.
• 51% indicated compostable packaging was important to them.

Bottom line: with so much talk focused on myriad environmental issues over the past few years, and growing impetus in recent months, the consumer is increasingly aware. There is growing concern about packaging and what becomes of it after it has served its purpose. The three R’s—Reduce, Reuse, Recycle have hit home with greater numbers of consumers now.

Consumer product companies ought to consider: what better way is there to sell sustainable values than through that most important of marketing initiatives—packaging? Utilizing the three R’s in updated packaging design sends a powerful message. Better yet, using the packaging itself as a communications platform about the company’s commitment to sustainability gives marketers a powerful tool to reach consumers. Targeting that messaging to the company’s proper green demographic(s) becomes meaningful. Tying that messaging in to the company website, advertising and every other marketing initiative it uses, will further educate targeted consumers.

Contrary to the belief that consumers are increasingly skeptical due to widespread green-washing, The Hartman Group’s survey yielded an eye-opening statistic. 82% of those surveyed thought most companies’ green claims “mostly true”. Of course, it is important to maintain trust with consumers by being honest about all of the company’s sustainability practices, including those made on and about packaging. It is better to say nothing, than it is to make claims that stretch the truth; the latter can do considerable damage to the brand, precisely when building consumer trust has never been more important.

Consumers are not only looking to niche companies that have made sustainability a cornerstone of their brands. They’re also expecting established mass market companies to move in this direction, and rewarding those that do. Being responsible stewards of the environment by adopting better business practices is step one. Offering more sustainable products and continuing product innovations is step two and that necessarily leads to sound packaging.

Sustainable packaging should be used to push the values of “reduce, reuse and recycle” and as the ultimate platform to reach the target consumer with the company’s overall sustainable positioning. Here is a terrific opportunity to further differentiate brands in a meaningful way—right now and for the future. Seizing this golden opportunity will lead to green in more ways than one.

Ted Mininni is president of Design Force, Inc., the leading brand design consultancy to consumer product companies with Enjoyment Brands™. Design Force helps their clients market brands that deliver positive, gratifying experiences to consumers. Their expertise lies in emotionally connecting consumers to brands by creating compelling visual brand experiences, which motivate purchase decisions.

ADP Says U.S. Companies Decreased Payrolls by 371,000

Bloomberg reports:

By Shobhana Chandra

Aug. 5 (Bloomberg) -- Companies in the U.S. cut fewer jobs in July as the worst recession since the Great Depression eased, a private report based on payroll data showed today.

The estimated 371,000 drop, higher than economists had forecast, followed a revised 463,000 decline the prior month, figures from ADP Employer Services showed today.

Stabilization in housing and manufacturing and help from the federal stimulus effort will usher economic growth this quarter, economists say. Consumer spending, which accounts for 70 percent of the economy, may be slow to gain speed as home prices fall, wages stagnate and unemployment climbs.

“We have seen the worst, but there is still more pain ahead,” said David Semmens, an economist at Standard Chartered Bank in New York. “Consumer spending will remain weak, especially as we head towards double-digit figures in unemployment.”

Stocks opened little changed after index futures dropped immediately following the report. The Standard & Poor’s 500 index was at 1005.84 at 9:32 a.m. in New York. Treasuries fell, sending yields on benchmark 10-year notes to 3.74 percent from 3.69 percent late yesterday.

The Labor Department’s payrolls report, due in two days, may show employers cut another 328,000 jobs in July and unemployment jumped to 9.6 percent, according to the median forecasts in a Bloomberg News survey.

Worst Job Market

The economy already has lost 6.5 million jobs since the recession began in December 2007, the most of any economic slump since the 1930s.

The ADP report was forecast to show a decline of 350,000 jobs, according to the median estimate of 30 economists in a Bloomberg survey. Projections ranged from decreases of 410,000 to 200,000.

ADP includes only private employment and does not take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.

“We’re heading in the right direction and heading there at about the pace we expect,” Chris Varvares, president of Macroeconomic Advisers, said on a conference call today. Job losses may “dwindle toward zero” by the end of this year, and payrolls may turn positive by early 2010, he said.

Employers announced 5.7 percent fewer job cuts in July than the year earlier, according to a report today by Chicago-based placement firm Challenger, Gray & Christmas Inc. Following a 9 percent drop in June, it was the first time since late 2007 that planned firings declined for two months in a row.

Today’s ADP report showed a decrease of 169,000 workers in goods-producing industries including manufacturers and construction companies. Service providers cut 202,000 workers.

Breakdown

Employment in construction dropped by 64,000, while financial firms decreased jobs by 26,000, ADP said.

Companies employing more than 499 workers shrank their workforce by 74,000 jobs. Medium-sized businesses, with 50 to 499 employees, eliminated 159,000 jobs and small companies decreased payrolls by 138,000, ADP said.

Announcements of staff reductions continued this week. General Motors Co. disclosed it may cut more U.S. hourly jobs after an offer of buyouts and early retirements fell about 7,500 workers short of the reorganized automaker’s target.

The ADP report is based on data from 400,000 businesses with about 23 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006.

Smarter Packaging presents: Crazy Corner, something not related to packaging but interesting!

Smarter Packaging's Crazy Corner article of the week:
Every week I come across an article that is not only interesting but crazy. By crazy I mean that it is insane that certain realities are just part of our everyday life today. In this segment I try to point out some news I came across on a weekly basis that is not packaging related at all but still interesting to read and I hope you find as crazy as I do, anyway here is the first aticle of this segment that I will try and make a weekly feature.
Enjoy!

From my daily browse on Bloomberg I came across this:
Antidepressant Use in U.S. Doubled Over Decade to 10% in 2005

By Nicole Ostrow

Aug. 3 (Bloomberg) -- The number of Americans taking antidepressants doubled to 10.1 percent of the U.S. population in 2005 compared with 1996, increasing across income and age groups, a study found.

An estimated 27 million U.S. people ages 6 and older were taking the drugs by 2005, while their use of psychotherapy declined, according to Columbia University research. Each person treated for depression in 2005 also filled more prescriptions, an average of 6.9 that year compared with 5.6 in 1996, said the study published in the August issue of the Archives of General Psychiatry.

The surge in antidepressant use propelled that class of treatments to become the top-selling U.S. medicines in 2005, surpassing blood-pressure prescriptions, the study said. Those findings highlight the need for doctors who aren’t psychiatrists and who prescribe these medicines to be trained to diagnose and manage depression so patients get the most effective treatment, said the lead author Mark Olfson.

Rising use of the drugs “may involve the introduction of new antidepressants, the increase in the direct-to-consumer advertising, lessening stigma with seeking mental health care” and more Americans acknowledging they are depressed, said Olfson, a professor of clinical psychiatry at Columbia University and New York State Psychiatric Institute in New York, in a July 31 telephone interview. “The reasons for this increase are not clear.”

Antidepressant Sales

The trend fueled sales of such antidepressants as Eli Lilly & Co.’s Prozac, Forest Laboratories Inc.’s Celexa and Pfizer Inc.’s Zoloft. The research found more growth in the class of antidepressants known as selective serotonin reuptake inhibitors and a decline in tricyclic antidepressants.

The researchers analyzed U.S. data from the 1996 and 2005 Medical Expenditure Panel Surveys, sponsored by the Agency for Healthcare Research and Quality, which provide national estimates on health-care usage and costs. The 1996 survey found 5.8 percent of 18,993 people surveyed took antidepressants, compared 10.1 percent of the 28,445 people surveyed in 2005.

The results also showed a jump in the use of antidepressants across demographic groups, with the exception of blacks. The rate of use of the medicines among blacks in 2005 was 4.5 percent, less than half that of whites. The rate for Hispanics increased to 5.2 percent in 2005 from 3.7 percent in 1996. Among all races, the percentages of men and women of all ages, marital status and educational levels taking antidepressants in 2005 rose from 1996, the study showed.

Diagnoses Rise

Olfson said it’s unclear if more people are depressed or if more people are just taking antidepressants. Other studies have found diagnoses of major depression in adults increased from 3.3 percent in 1991-1992 to 7.1 percent in 2001-2002, according to the journal article.

The new research found a decline in nondrug therapy. About 20 percent of people being treated with antidepressants also underwent psychotherapy in 2005 compared with almost 32 percent in 1996, the data showed.

“There’s being a greater emphasis placed on medications rather than psychotherapy in treating mental health problems,” Olfson said. “I hope these numbers will draw attention to how many people are being prescribed these medications.”

Cost Impact

Olfson said the decline in therapy may be because people have to pay more out of pocket for that treatment. He said depressed people not under the care of a psychiatrist don’t typically follow through with their treatment or stay on their medicines long enough to improve. Medicine and therapy in combination are proven to be more effective than either treatment alone, he said.

The number of children ages 6 to 17 who took antidepressants jumped 78 percent in 2005 from 1996, Olfson said, from a rate of 1.4 per 100 children to 2.6 per 100. The increase continued after the U.S. Food and Drug Administration in October 2004 issuing a “black box” warning that antidepressants increase the risks of suicide in children and adolescents.

The study was sponsored by the Agency for Healthcare Research and Quality and the National Alliance for Research on Schizophrenia and Depression.

To contact the reporter on this story: Nicole Ostrow in New York at nostrow1@bloomberg.net.

Recession Worse Than Prior Estimates, Revisions Show

Bloomberg reports:
By Bob Willis

July 31 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world’s largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said today in Washington.

“The current downturn beginning in 2008 is more pronounced,” Steven Landefeld, director of the Commerce Department’s Bureau of Economic Analysis, said in a press briefing this week. The revisions were in line with past experience in which initial figures tended to underestimate the severity of contractions during their early stages, he said.

The updated statistics also showed that Americans earned more over the last 10 years and socked away a larger share of that cash in savings. The report signals the process of repairing tattered balance sheets following the biggest drop in household wealth on record may be further along than anticipated.

Spending Slumps

Consumer spending, which accounts for 70 percent of the economy, decreased 1.8 percent in last year’s fourth quarter from the same period in 2007, exceeding the prior estimate of a 1.5 percent drop. Purchases also began sinking sooner than previously projected, registering their first decline at the start of 2008 rather than in the second half.

Treasuries headed higher after the report, while stock- index futures declined. Benchmark 10-year note yields were at 3.58 percent at 8:51 a.m. in New York, from 3.61 percent late yesterday. Contracts on the Standard & Poor’s 500 Stock Index were down 0.3 percent at 979.

Residential construction fell 21 percent during the period, almost 2 percentage points more than previously reported, aggravating what was already the worst slump since the Great Depression.

The Commerce Department also reported today that the economy contracted at a 1 percent annual rate from April through June after shrinking at a 6.4 percent pace in the first quarter, the most since 1982. The decline in the first three months of the year was previously reported as 5.5 percent.

Recession’s Start

The National Bureau of Economic Research, the accepted arbiter of U.S. business cycles, last year determined the recession started in December 2007. The private group is based in Cambridge, Massachusetts,

Today’s updates are part of comprehensive revisions that take place about every five years and are more extensive than the changes announced at this time each year. Figures as far back as 1929 can be revised.

Over the most recent period, the third quarter of 2008 underwent one of the biggest changes, going from a 0.5 percent decrease in gross domestic product to a 2.7 percent drop. The new reading better illustrates the effect the September collapse of Lehman Brothers Holdings Inc. had on the economy and credit markets.

The deeper deterioration last year underscores why Federal Reserve Chairman Ben S. Bernanke and his colleagues at the central bank cut the benchmark rate to a record low and extended credit to non-banks for the first time since the 1930s.

The new GDP data also help explain why the unemployment rate shot up 2.3 percentage points last year, the biggest annual jump since 1982.

2001 Recession Milder

The revisions showed that the 2001 recession was less severe than originally estimated, reflecting a smaller decline in business investment. The economy actually grew 0.1 percent from the fourth quarter of 2000 to the third quarter of 2001, erasing the 0.2 percent drop previously reported.

Personal income was revised up over the last decade, after the government boosted its adjustments for the underreporting and non-reporting of income using more recent data from the Internal Revenue Service. The increases in the most recent years reflect gains from rents, interest and proprietors’ income. The government changed the way it accounts for natural disasters, such as Hurricane Katrina, eliminating much of the prior volatility in income calculations.

More Savings

Higher incomes and less spending translated into bigger savings. The savings rate for 2008 was revised up to 2.7 percent from 1.8 percent. The rate shot up to 5.2 percent in the second quarter, the highest level since 1998.

The government revised corporate profits down for 2006-2008 and up for 2004 and 2005.

Finally, Commerce shifted food services, which include meals purchased at restaurants or served in schools, out of the food category. As a result, the Fed’s preferred inflation gauge -- which tracks consumer spending and excludes food and fuel -- was pushed up by 0.2 percentage point for the three-year period from 2006 to 2008.

The costs of meals away from home are not as volatile as fresh food, the government said, and therefore services should be included in the measure commonly known as the core index.

To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net

Gold Erases Gains in New York, London After Consumption Drops

Bloomberg reports:

By Claudia Carpenter

July 31 (Bloomberg) -- Gold erased gains in London and New York after the U.S. reported a drop in personal consumption, paring a drop in the dollar.

U.S. personal consumption fell 1.2 percent in the second quarter, the Commerce Department said today, more than the 0.5 percent median decline forecast in a Bloomberg News survey. Gold has moved in an opposite direction to the dollar every month since April, resuming a pattern in five of the past seven years.

The dollar is the “strongest driver” of gold prices, Alan Heap, a Sydney-based analyst of Citigroup Inc., wrote in a report today.

Gold futures for December delivery fell $1.40, or 0.2 percent, to $935.90 an ounce as of 8:41 a.m. on the New York Mercantile Exchange’s Comex division, paring the monthly gain to 0.6 percent. Bullion for immediate delivery dropped 0.1 percent to $933.74 after earlier rising as much as 0.6 percent.

The dollar dropped 0.3 percent, after earlier falling as much as 0.6 percent.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

U.S. Initial Jobless Claims Rise by 25,000 to 584,000

By Courtney Schlisserman

July 30 (Bloomberg) -- The number of Americans filing claims for jobless benefits last week held below levels seen in late June, before auto-related distortions set in, indicating firings are slowing as the economy stabilizes.

Applications rose by 25,000 to 584,000 in the week ended July 25, higher than forecast, figures from the Labor Department showed today in Washington. More than 600,000 claims were filed every week last month. The number of people collecting unemployment insurance decreased for a third week.

An analyst at Labor said distortions from the timing of auto-plant shutdowns “worked themselves out” of the data last week, returning claims to “trend.” While a resumption in hiring will be slow to materialize, payroll reductions are likely to slow as housing and manufacturing, the areas that led the economy into the worst recession in five decades, steady.

“Initial claims are still trending lower, which does suggest some improvement in conditions,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York, which had forecast claims would increase to 585,000. “What we are seeing is less firing.”

Futures on the Standard & Poor’s 500 index extended their gains after the report, rising 1.1 percent to 985.60 at 8:43 a.m. in New York. Futures also rose as Motorola Inc. reported a loss that was narrower than estimated and commodity producers rose on higher metal prices.

Economists’ Forecasts

Economists forecast claims would increase to 575,000 from a previously estimated 554,000, according to the median of 40 projections in a Bloomberg News survey. Estimates ranged from 539,000 to 630,000.

The four-week moving average, a less-volatile measure than weekly initial claims, fell to 559,000 from 567,250 the prior week. The average at the end of June, before the auto distortions set in, was 616,000, higher than last week’s reading.

Claims tend to be volatile in late June and July when automakers typically halt production and idle workers to re-equip factories to build new models. General Motors Co. and Chrysler Group LLC halted production earlier than usual as they worked through bankruptcy proceedings.

GM emerged from bankruptcy this month and Chrysler did the same in June.

Continuing Claims

The level of continuing claims decreased by 54,000 to 6.197 million in the week ended July 18, the lowest level since April. Because they come out with a one-week lag, these figures are still being distorted by the plant closings.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 4.7 percent in the week ended July 18. Eight states and territories reported an increase in new claims, while 45 reported a decrease. These data are also reported with a one-week lag.

Figures for the week ended July 18 coincide with the week the Labor Department conducts its survey for the monthly payrolls report. U.S. employers have eliminated 6.5 million positions since the recession began in December 2007, the most of any downturn since the Great Depression.

Economists have forecast that the worst of the job cuts may have past. Even so, hiring is limited and economists surveyed by Bloomberg earlier this month project the jobless rate will exceed 10 percent by early 2010.

‘Plodding’ Rebound Seen

The U.S. economy is nearing its low point and will begin a “gradual, slow, plodding,” rebound next year, Southern Co. Chief Executive Officer David Ratcliffe said yesterday in an interview. “For the most part we believe that this has stabilized and is poised for a recovery.”

Southern, the biggest U.S. power producer, said second-quarter earnings rose 15 percent as lower costs cushioned the impact of declining electricity demand.

Verizon Communications Inc. is among companies still paring staff. It said July 27 it plans to eliminate more than 8,000 jobs in the second half.

Eye on the Economy: Planet Goldman reigns supreme

As King Midas is fondly remembered by the Greeks for turning everything into gold that he touched bringing about the term, Midas touch, another institution has during this global economic recession been on the right side of the market every time, timing it more than perfect constantly.
As was reported on July 19th on this blog, Goldman posted record profits along with JP Morgan/Chase. The fact that Goldman Sachs made record profits betting against it's own bad mortgages bundled/packaged together as derivatives and hedge its own bets and had companies like AIG to provide insurance - known as credit-default swaps as well as receiving government TARP funds is not sitting well with main street.

Matt Taibbi attacked Goldman in his article in Rolling Stone magazine titled, "THE GREAT AMERICAN BUBBLE MACHINE", "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again"
please read the full article here

David Weidner also had a go on the www.marketwatch.com in his article "Government Sachs is in control"
please read the full article here
Matt Goldstein also posted an article on Reuters, "Goldman’s real estate gambit", "This savvy and somewhat stealthy strategy enabled Goldman to pawn off lots of its soon-to-be toxic mortgages and mortgage-backed securities on other institutions — forcing those foolhardy speculators to pay the price when the subprime market blew up.And much to everyone else’s chagrin, Goldman even made money off the housing meltdown when some of its hedges — specifically a bet that a subprime mortgage index would plunge — paid off handsomely."
Please see the full article here.

No article on Goldman can also be posted without Max Keisers meltdown on their Modus Operandi, Enjoy.

Quote of the Day

"The reason I talk to myself is that I'm the only one whose answers I accept. "
George Carlin

Eye on the Economy: U.S. manufacturers scraping bottom

From the Charlotte Observer:
U.S. factory output at its lowest point in 60 years, and even massive job cuts haven't produced profits.

By Kevin G. Hall
McClatchy Newspapers

Posted: Tuesday, Jul. 28, 2009

LANDRUM, S.C. Las Vegas has always served as an important – if odd – barometer for Charles Martin's manufacturing firm, which makes commercial-grade door hinges.

That's because even in bad times, casinos still went up in Nevada.

Not so today.

“When gamblers aren't building, forget about people who make rational decisions,” said Martin, president of Bommer Industries, the last completely American manufacturer of door hinges for hotels, malls, universities and other big commercial buyers. “The gamblers have quit building, and they're always optimistic.”

The U.S. manufacturing sector is trying to claw back from a deep downturn, and manufacturing globally is on the skids. The climb back will be long and painful because the situation facing the sector isn't just bad. It's awful.

The Federal Reserve's latest measure of industrial output shows that in June, U.S. manufacturers operated at 64.6 percent of capacity. It means they are producing at more than a third below their potential – the worst rate since recordkeeping began in 1948. Since December 2007, through last month, manufacturers shed 1.9 million jobs, according to the U.S. Labor Department.

Located 70 miles west of Charlotte, Bommer Industries was founded in 1876 to make hinges for barn doors. It's since come to dominate the market for spring-loaded hinges in a way that Xerox became synonymous with copiers. Martin's product isn't glamorous, but it's essential to virtually any large-scale commercial construction.

That makes Bommer a good measure of the broader U.S. manufacturing sector. Already struggling against what Martin calls the “Chinese invasion,” the company is positioning itself for the eventual economic rebound, trimming its workforce by 18 percent and hunting for new business.

Even if the recession ends in the fall, as many economists predict, significant growth for Bommer and other manufacturers will remain elusive.

“At best, the latter part of 2010,” Martin said during an in interview in tiny Landrum, where the company relocated from Brooklyn, N.Y. in 1953. “From my own perspective, we've got at least 12 (more) months in the doldrums.”

Data researcher Sageworks Inc. collects data from privately held manufacturers – those who don't offer shares of stock to the public. It recently found bad news in two belwethers: The time to collect payment from buyers and the amount of inventory on hand.

Another important measure, profit per employee, is at the lowest level since the 2001-2002 recession. Sales by private manufacturers contracted almost a percentage point in 2001, but have shrunk by more than 3.7 percent in the first half of this year. Even as manufacturers shed jobs, they're not becoming more profitable.

“Basically the economy is softer than we thought,” said Brian Hamilton, CEO of Sageworks. “It's taken us by surprise… and is worrisome. We're obviously not as reliant on the manufacturing sector, but that's the one you think always has more stability.”

The Bureau of Economic Analysis estimates manufacturing accounted for 11.5 percent of all U.S. economic activity last year – far below the record 28.3 percent of all U.S. economic activity in 1953.

In past recessions, there wasn't the blanket downturn witnessed today.

“All the key demand components have fallen off and that is unprecedented, especially when compared to the last recessions,” said David Heuther, chief economist for the National Association of Manufacturers. “This downturn has really hit manufacturing across the board.”

Quote of the Day

Behold the fool saith, "Put not all thine eggs in the one basket" -- which is but a manner of saying, "Scatter your money and your attention;" but the wise man saith, "Put all your eggs in the one basket and --WATCH THAT BASKET."
- Pudd'nHead Wilson's Calender
Mark Twain