Quality Counts

May 5, 2003
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"I found a way to alleviate your fear of anthrax in the workplace," says the cigar-smoking boss seated behind his desk. "Great! What is it?" asks the employee standing in front of him. "You're fired," the boss responds.

That exchange, from an editorial cartoon published recently in the Pittsburgh Post-Gazette, provides a humorous, but all-too-true capsule of the economic climate amidst the terrorist activities that began with the attacks on the World Trade Center and the Pentagon last Sept. 11.

As I write this in early November, just prior to sending this issue to press, initial economic data from October are beginning to flow in. And the numbers aren't pretty, what with rising unemployment and declining manufacturing activity.

Given this environment, and the fact that manufacturing was in the midst of a slowdown even prior to the Sept. 11 attacks, it's not surprising that factory spending expectations for next year are down. The results of our second annual Quality Spending Survey, reported in this issue, confirm that.

But the good news is that the numbers aren't down as much as might be expected, given the conditions. Projections based on the survey show that discrete products manufacturers in more than 45,000 factories served by Quality magazine expect to spend some $3.4 billion in 2002 on quality equipment, software and services. That's down by just 15% from last year's $4 billion projection for 2001.

Further, there is evidence that most manufacturers are sitting tight with their 2002 quality spending budgets, despite the current uncertainty. Our spending survey was mailed to 5,000 Quality subscribers in August, and most of the 868 responses came back prior to Sept. 11. So as one way to check on the efficacy of our numbers, we sent a second, e-mail survey to an additional 3,100 Quality readers in October, asking how terrorist activities are affecting 2002 quality spending plans.

Of the 214 who responded to the e-mail survey, 47.7% said that recent terrorist activities had not altered their quality spending plans for next year, while another 28% said it was too early to tell how their spending will be affected. Only 18.7% said the terrorist attacks and their aftermath will likely cause them to reduce quality spending next year compared to 2001.

No one knows for certain, of course, where the economy will go from here. But as noted recently by BusinessWeek magazine, there are a number of reasons to believe that the current recession will be mild, and that recent economic data overstates the true weakness of the economy. "Businesses are rattled right now, but as they get a better handle on current and future demand, their ordering and hiring rates will come out of the deep freeze," the magazine says in its Nov. 12 issue.

We agree. And when the economy does turn up--more than half of the respondents to our October survey expect recovery by mid-year 2002 or sooner--the demand for quality in manufactured products is unlikely to be diminished. That prospect bodes well for quality manufacturing professionals, as well as for the vendors of quality equipment, software and services who serve the discrete products manufacturing market.

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