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U.S. and Texas Economic News Roundup

We think it’s important to stay up to speed on the news that impacts us all. It’s easy to get tied up in the daily grind and not notice what’s happening in the world around us. That’s why we check the headlines every day and when we come across interesting stories, we’ll share them with you. Plus, we want to hear from you. Feel free to drop a comment below.

We hope you’ll be able to leverage this economic and trend information to your advantage. Here’s a bit of what’s happening here in Texas and the U.S right now.

U.S. Cutting Tool Consumption

Earlier this month, the U.S. Cutting Tool Institute (USCTI) and AMT — The Association for Manufacturing Technology announced cutting tool consumption in the U.S. was up 1.3 percent in April, totaling $206.3 million. The number is down 1.9 percent from March’s numbers and includes data reported by companies that participate in the Cutting Tool Market Report. The report is a good representation of cutting tool consumption, and the analysis is a leading indicator of upturns and downturns in our manufacturing industry at home. There’s reason to believe the growth rate is slowing and reduced Boeing 737 production rates and unsettled trade agreements could be to blame. According to Mark Killion, Director of U.S Industries at Oxford Economics, although numbers are remaining above last year’s, new orders decreased in April. This aligns with slowing business investments and weakness in the motor vehicle sector.

Texas Employment Trends: Oil & Gas Trend Down

Employment is ramping up and unemployment falling in Texas. That’s pretty good news. According to recent data from the Federal Reserve Bank of Dallas, the Texas employment rate has seen an increase of 2.1 percent in May, following a 3.1 percent increase in April. And gains were pretty widespread in May, but manufacturing, hospitality, and oil and gas employment did fall, and shops are beginning to cut overtime. Texas lost four rigs, bringing total rig counts to 463. This may be why we are seeing some softening in the local economy. Interestingly, the information sector has been the only one to cut jobs this year. Employment gains were also spread throughout Texas’s major metro areas with the exception of San Antonio. Austin led the charge with 7 percent growth. 

Overall, unemployment numbers are down to a new record low of 3.5 percent in May, which aligns with the U.S. unemployment rate of 3.6 percent. Let’s hope those numbers hold on long term.

Texas Population Growth

Texas has some of the fastest growing cities in the United States. According to reports in late May from the United States Census Bureau, the largest population growth regions for the state include San Antonio (20,824), Fort Worth (19,552), Austin (12,504) and Frisco (10,884). Back in 2018, San Angelo surpassed the 100,000-population mark. Texas was also one of the four states that gained more than 50,000 housing units, with a whopping 172,000 new units added between 2017 and 2018. With population growth comes industry opportunity, and we’re seeing a surge here at home, as the Permian Basin has some of the best energy resources in the nation. While the outlook remains somewhat positive overall, it’s critical to remain cautious here at home as the economical terrain is starting to become a little rocky.

Energy Outlook

Pioneer Natural Resources is a company well known for drawing oil and gas from the Permian Basin using hydraulic fracturing. Back in 2014, it was projected that Pioneer could produce a million barrels per day by 2024. Today, Scott Sheffield, CEO of the company, says those numbers are doubtful due to their loss of investors. Investors know there are large amounts of gas in the shale formations; the question is how affordably can it be extracted. The company has already spent more than budgeted in order to meet that lofty goal and is in the midst of layoffs themselves.  We don’t have a crystal ball and can’t predict the future, but this certainly gives cause for concern of the future of fracking.

Texas Manufacturing Industry News

We happened upon some interesting news in The Texas Tribune. In April 2019, Senate Bill 649 passed the Senate and aims to increase the number of Texas plastic and paper manufacturers using recyclables as industrial feedstock to produce goods. It requires the Texas Commission on Environmental Quality and the Texas Economic Development and Tourism Office to increase demand for recyclable materials in the manufacturing industry. The bill won the endorsement of over 60 businesses, even the Texas Chemical Council. There have been talks about how to increase the use of recyclables in manufacturing; one idea is to place plants right at the source of the materials. This will obviously take more discussion and the plan will likely come from a third-party administrator. We’re interested to see how this pans out.

West Texas in the News

We pay close attention to state and national economic issues, but M&M Sales & Equipment has a soft spot for our hometown of Odessa. With abundant energy resources, infrastructure and a skilled workforce, Odessa is an ideal place for machinery, metal and chemical manufacturing facilities. Just recently, we read in the online publication Manufacturing.net that Facebook is planning a massive solar farm just north of Odessa. Called the Prospero Solar project, it will be Facebook’s first direct investment in renewable energy for its data centers and will have the capacity for 379 megawatts. You may be wondering why the social media giant is investing in solar. CEO Mark Zuckerberg says, “We set a goal for all our data centers and offices to use 100% renewable energy by 2020. These new solar projects will help us reach that goal.” Shell Energy North America and Facebook plan to share the power. As always, if you have questions and need expert advice on the cutting tools and supplies you need, just ask. M&M Sales & Equipment is here to help.

How Do I Choose the Right Saw Blade for My Project?

Every facility can improve productivity, profitability and safety with the proper tools. Cutting tools like saw blades are no different. Many of the saw blades on the market are manufactured with technology that allows them to cut faster and cleaner and stay sharper longer.

Yet, it’s not always cut and dry when it comes to choosing the best cutting tools for the job. Choosing the right cutting, forging or processing tools is important whether you’re a professional working in an industrial facility or you’re a weekend warrior taking on a home improvement project. Either way, we want to be sure you have the tools you need to get the job done well.

Next time you’re choosing a saw blade, ask yourself these simple questions:

What kind of saw will be used?

All saws, including band saws, circular saws, radial-arm saws, chop saws or compound miter saws require different types of saw blades. Using the wrong one can not only impede production, it can be downright dangerous and ruin your tool as well. No one wants to experience downtime when trying to complete a project. Having to stop to repair or replace your tools can cost you time and money.

What material will you be cutting?

Light-gauge steel, stainless steel, natural stone, concrete, ceramic tiles and various kinds of wood all require blades made from specific materials. Use the wrong saw blade material and you may as well be using a butter knife. Some of the most common saw blades for metalworking include Carbon Hard Back, Carbon Flex Back, Bi-Metal, Carbide Tipped and Grit Edge. We carry a huge selection of metal-cutting tools and supplies from industry leaders like LENOX, Starrett, Arntz, Fein and Evolution.

How often will the saw blade be used?

It’s just common sense that the more you use a saw blade, the quicker it will dull. Remember to regularly inspect your blades for wear. For daily cutting practices, implement an inspection schedule into your standard operating procedures. This is especially important in manufacturing facilities and plants when there are multiple shifts. For safety be sure to keep a changeout log handy, so that the next person to use the tool will know exactly when maintenance is required.

M&M Sales & Equipment recommends these preventative maintenance and safety tips:

  1. Always wear safety glasses, goggles or face shield.
  2. Clamp your workpiece to keep both hands on the cutting tool, if applicable.
  3. Clear blades of debris and replace blades regularly.
  4. Double-check and test parameter settings (speed and feed rate).
  5. Use guarding when appropriate.
  6. Check coolant levels.

Our partner Lenox offers a blade selector on their website to get you started. Access the Lenox Blade Selector here. We can help you select exactly the right cutting tools you need to work safely and effectively. Just contact us and a member of our staff will happily answer any questions you have. M&M Sales & Equipment is here with expert advice when you need it. Just stop in or call one of our four locations in Odessa, Lubbock, Amarillo and Ft. Worth.

Steady as it goes for Permian Basin rig counts

Steady as it Goes for Permian Basin Rig Counts

How Rig Counts Indicate Oil and Gas Economic Health

Since 1944, Baker Hughes has been supplying data on rotary rig counts to give insight into the economic health of our energy industry. Beginning in 1975, the company started providing monthly international rig counts, which offers a more in-depth look into the drilling industry. Baker Hughes Rig Counts has been consistent for more than 70 years and is considered a good measuring tool for demand. The active rig count is also a leading indicator of the number of products used in drilling, completing, producing and processing hydrocarbons (oil and gas).

Let’s look at the most recent summary count from April 2019:

We know that the oil industry is a never-ending cycle of highs and lows, and this latest report shows U.S. oil rig counts are a bit unsteady. According to an article published by Reuters, U.S. energy firms reduced the number of oil rigs operating to the lowest level in almost nine months.

Why the slowdown in oil drilling?

It may be due to independent exploration and production companies cutting spending to focus on earnings growth instead of simply upping output. It’s projected that crude prices will drop going further into 2019, so firms are bracing themselves for the change.

For the Permian basin however, numbers are holding steady compared with the rest of the country. The Permian Basin’s active rig count is staying steady at 459, down one from the prior week and up one from the prior year.

That’s good news for Texas and both the businesses and families impacted by the ebb and flow of the energy trade. We have a vested interest in the economic health of the industry, that’s why we thought we’d pass on this bit of information to our customers and friends. Be sure to stay up to date on the issues that matter to you by checking out our blog.

If you ever need help selecting the right cutting tools, abrasives or safety supplies, contact M&M Sales & Equipment. We’d be happy to help.

Guhring SelectMill

New Product: Guhring SelectMill for Optimal Price and Efficiency

Guhring is a world-class manufacturer of drills, end mills, taps, tool holders and other innovative cutting tools and has been for over 100 years. Since they began production of tools in their Wisconsin facility in 1982, they’ve been busy bringing industry-leading Guhring technology here to the United States.

Another interesting fact is that they actually produce their own carbide rod as the substrate material for all of their carbide end mills. That attention to detail and commitment to quality is why we believe so strongly in their product lineup and wanted to share their latest product release with you. 

Introducing the new SelectMill German-made carbide end mill from Guhring

SelectMill is a new program of German-made carbide end mills ideal for the customer looking for a high-quality and low-cost option. These universal end mills are designed to excel in a wide range of materials and are crafted for shops with shorter production runs or who are machining different materials on a day-to-day basis.

Their competitive price tag comes from years of expertise manufacturing high-performance tooling. The result is a streamlined manufacturing process that delivers maximum performance at a reasonable cost.

The SelectMill offering includes:

  • 2, 3, and 4-flute general purpose tools in “standard” and “long” lengths, with FIREX heat-resistant coating
  • A series of 3-flute aluminum end mills that extends the range of materials possible to machine with SelectMill
  • For roughing operations, SelectMill offers a roughing end mill with a fine-tooth knuckle profile, and 3-4 flutes depending on diameter
  • High performance 4-flute variable helix end mill completes the SelectMill offering

M&M Sales and Equipment is committed to being your go-to source for all your cutting tools, abrasives, safety supplies and more. If you’d like to learn more about the Guhring line of end mills or just have questions, contact M&M Sales and Equipment today.

Learn more about Guhring’s SelectMill Program.

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Oil and the State of Small Business

    As oil prices struggle to climb above $50/barrel and price stability seems to be anything but a reality, how do we plan for success in the current economic environment? The article below, published on FoxBusiness.com points to optimism in the market due to the lowering of crude inventories and the expectation that OPEC will extend their production cuts through the end of the year. But, is optimism enough to keep a business afloat? After 2 years of being hammered by poor oil production and now going into a third year of marginal growth now is the time to step back from your business, take the 20,000 ft. view and decide what you need to do to become or stay profitable! If you have already done this, great!! you are ahead of the pack. If you are sitting around waiting for the economy to right itself I’ve got 3 quick “projects” that you can tackle to start being proactive instead of reactive in your business.

 

  1. Read “Simple Numbers, Straight Talk, Big Profits” by Greg Crabtree. If you are new to P&L statements or business finance this short, easy to read book will get you up to speed quickly so you can make decisions on facts and your gut instead of your gut alone. (I’ll give a copy of this book to the first 2 people who comment asking for a copy.)
  2. Set SMART (Specific, Measurable, Achievable, Relevant, Time Bound) goals and keep them in front of you daily!!
  3. Find one or two KPI’s(Key Performance Indicator) and start measuring your performance. I would highly suggest using Revenue per Full Time Equivalent or Labor ROI as one of your indicators if you have more than a couple employees.

I’ve pasted the FoxBusiness article below. It’s a pretty interesting read as well. Reach out and let me know what you think of the article or anything in this post.

Oil Gains on More Support for OPEC Cuts, Optimism About U.S. Crude Draw

Markets Reuters

Oil prices rose for a second day on Thursday, closing more than 1 percent higher as support grew for OPEC output cuts a day after the U.S. government reported a big draw in crude inventories, boosting confidence that a global glut might diminish.

On Wednesday, the U.S. Energy Department reported that U.S. crude stockpiles posted their biggest weekly drawdown since December as imports dropped sharply. Inventories of refined products also fell.

“People are hinging the optimism today on the recent drawdown in inventories and I think that might last as long as we don’t have another inventory build,” said Stewart Glickman, head of energy research at CFRA Research in New York.

In recent days major producers like Iraq, Algeria and Kuwait have voiced support for extending last year’s deal from the Organization of the Petroleum Exporting Countries and other producers to cut supply by almost 1.8 million barrels per day (bpd).

On Thursday, non-members Turkmenistan and Equatorial Guinea said they would also join the cuts, though they are smaller producers.

On May 25, OPEC will meet to determine policy for the second half of 2017. Most analysts expect the group to extend cuts until at least year-end. If they don’t, Glickman said, “they’ll take the floor out from oil prices.”

OPEC said Thursday that group production fell in April. Despite the reduction, there are few signs that supply has fallen significantly as other producers have continued to supply key customers, especially in Asia.

OPEC also said it sees more supply coming from non-member countries such as the United States. The cartel raised its estimate of total oil supply growth from non-OPEC producers this year to 950,000 bpd from a previous forecast of 580,000 bpd.

U.S. oil production <C-OUT-T-EIA> rose to more than 9.3 million bpd last week, highest since August 2015. Even with this week’s drawdown in U.S. crude stocks, Glickman said the country has a way to go to reduce oversupply.

“You’re going to have to have a few weeks of 5 million-barrel draws just to get back to square one,” he said.