Monthly Archives: January 2014

Question: Is the United States economy now in a “Post-Industrial, Service Sector” phase?

To answer, here are some interesting facts, as compiled by the National Association of Manufacturers, the leading trade group representing the U.S. manufacturing sector.

  • In 2012, manufacturers contributed $1.87 trillion to the economy, up from $1.73 trillion in 2011. This was 11.9 percent of GDP. For every $1.00 spent in manufacturing, another $1.48 is added to the economy, the highest multiplier effect of any economic sector.
  • Manufacturing supports an estimated 17.2 million jobs in the United States—about one in six private-sector jobs. Nearly 12 million Americans (or 9 percent of the workforce) are employed directly in manufacturing.
  • In 2011, the average manufacturing worker in the United States earned $77,060 annually, including pay and benefits. (The average worker in all industries earned $60,168.)
  • Manufacturers in the United States are the most productive in the world, far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards.
  • Manufacturers in the United States perform two-thirds of all private-sector R&D in the nation, driving more innovation than any other sector.
  • If manufacturing in the United States were its own country, it would be the 10th largest economy in the world!

The metal service center industry exists to support a robust domestic manufacturing sector. Future Alloys plays a vital role, by stocking a wide array of aluminum plate, aluminum rod and aluminum bar. We carry “hard to find” items like 7075 plate up to 12” thick, and 7075 rod up to 16” diameter. Our extensive inventory, together with our state of the art precision sawing equipment, allow us to provide just in time deliveries of aluminum mill products to customers around the globe.

One expanding manufacturing sector that continues to provide high tech jobs is the aircraft industry. In fact, the Boeing company predicts worldwide demand of 35,280 new airplanes in the next 20 years, as illustrated in the following graphic:

This robust demand for airplanes will drive consumption of heat treated  aluminum mill products, particularly 7075 and 7050 plate, rod and bar. 2024 and 2124 sheet and plate are also used extensively in aircraft production. With our extensive inventory and precision processing equipment, Future Alloys is well positioned to take advantage of the coming boom in commercial aircraft production.

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Finally…some GOOD news!

US factory activity expanded in September 2013 at the fastest pace in 2.5 years, an encouraging sign that manufacturing could lift economic growth and hiring in the coming months.

The Institute for Supply Management, a trade group of purchasing managers, said Tuesday that its manufacturing index rose in September to 56.2, the highest since April 2011. That’s up from 55.7 in August and the fourth straight increase in the index. (A reading above 50 indicates growth.)

Manufacturers added jobs last month at the fastest pace in more than a year and ramped up production as well. They also received new orders at a healthy pace, though slower than in August.

U.S. factories are showing signs of picking up after slumping earlier this year. A modest recovery in housing and strong auto sales are pushing up demand for raw materials such as steel, aluminum and other metals, auto parts, furniture and appliances.

The economy expanded at a 2.5 percent annual pace in the April-June quarter, up from a 1.1 percent annual rate from January through March. Many economists believe growth slowed in the July-September quarter to a 2 percent pace or below. But the gains in manufacturing could set the stage for stronger growth in the October-December quarter.

Earlier this month, the Federal Reserve said manufacturers boosted their output in August by the most in eight years. The gains were driven by a robust month at auto plants. Speaking of the automobile market, aluminum plate, aluminum rod and bar and aluminum castings like those sold by Future Alloys have been replacing steel as the domestic carmakers strive to meet increasingly stringent federal fuel economy standards. In fact, aluminum use in cars is expected to nearly double by 2025!

Demand for so-called core capital goods rose 1.5 percent in September. Core capital goods are a good measure of businesses’ confidence in the economy and include items that point to expansion, such as machinery and computers.

In another sign of strength in the manufacturing sector, on October 8, 2013 Alcoa, the largest U.S. aluminum producer, reported better-than-forecast quarterly earnings after its smelting business returned to profitability and results improved at a unit that makes auto and aerospace parts. Alcoa reiterated its estimate that global aluminum demand will grow by 7 percent this year. Demand from the global aerospace industry is projected to grow as much as 10 percent and auto demand growth will be as much as 4 percent. This in turn will result in increased demand for Alcoa’s mill products divisions that produce 7075 T651 and 6061 T651 aluminum plate, aluminum rod and aluminum bar.

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Fascinating facts about aluminum!

Aluminum is lightweight, strong, corrosion-resistant, infinitely recyclable, and an essential part of our daily life.

Comprising a little over 8% of the earth’s crust, aluminum is the most abundant metal on the planet. It is the third most common element after oxygen and silicon.

In today’s modern society, aluminum products are just as abundant. Since its commercial production began little more than a century ago, aluminum has become the material of choice for a diverse range of applications and utilities.

Aluminum was once considered to be a “precious metal”, even more valuable than gold! It is said that Emperor Napoleon III of France once gave a banquet where the most honored guests were given aluminum cutlery, while everyone else had to settle for gold.

Aluminum’s intrinsic properties have contributed to its popularity and varied uses.

Aluminum’s strength can be adapted to the application required by modifying the composition of its alloys. Some alloys like 7075 T651 have strength approaching that of steel, while weighing only 1/3 as much. In vehicles, aluminum reduces unnecessary weight and therefore boosts fuel efficiency.

Releasing no taste, odors or toxins, aluminum is ideal for beverage, food and pharmaceutical packaging.

Naturally generating a protective oxide coating, aluminum’s corrosion resistance properties are particularly useful for protection and conservation of equipment used in corrosive environments.

Aluminum conducts heat and electricity twice as well as copper based on weight. Aluminum now plays a major role in power transmission lines.

Aluminum is ductile. Its low density and melting point allow products to be formed right up until the last stages of a product design.

As a reflector of heat and light, aluminum is suitable for such applications as solar technology, commercial lighting and rescue blankets.

Aluminum is 100% and infinitely recyclable with no deterioration in quality. In fact, 75% of the aluminum produced since its initial discovery is still in use today!
Utilizing recycled aluminum consumes just 5% of the energy it takes to produce from virgin materials.

Sourced from bauxite ore, the material is refined into aluminum oxide trihydrate (alumina) using the “Bayer process”, and then reduced via a smelting process into metallic aluminum. Up to four tons of bauxite are needed to produce one ton of aluminum metal.

Once formed, aluminum is alloyed with other materials, usually iron, silicon, zinc, copper and magnesium, to create aluminum alloys with different properties. The type of alloy is designated with a serial number. For example, 1000 series alloys comprise almost pure aluminum, while 7000 series denote a zinc alloy.

In its alloyed form, aluminum can be processed in a number of ways. Usually it is extruded, cast or rolled.

Extrusion: A solid aluminum cylinder called a billet (available in a variety of alloys, pretreatments and dimensions), is heated and squeezed through a die with a shaped opening to create a desired profile. Extrusions such as 6061 T6511, 2024 T3511 and 7075 T6511 are widely used in aerospace, construction, road and rail applications.

Casting: Using either sand casting or die casting techniques, the molten aluminum is shaped according to a mold.

Rolling: Aluminum ingot passes through a hot-rolling mill and is then transferred to a cold-rolling mill, which can gradually reduce the thickness of the metal down to as light as 0.002” thick foil. This is how aluminum plate like 2024, 6061 and 7075 is produced.