Last updateThu, 22 Mar 2018 4pm


Less Complicated Companies Have Competitive Advantage, Study Shows

Corporations often respond to an increasingly complex business environment by adding new functions, layers, roles, rules, and processes, hampering productivity and hindering growth and profitability, according to a recent study conducted by The Boston Consulting Group (BCG). Reducing complicatedness, the results suggest, can significantly improve responsiveness and create competitive advantage over slower-moving rivals.

Complicatedness can affect any kind of company, the study shows. Size doesn’t matter. Complicatedness can affect even the smallest companies if their processes, systems, and cultures hamper efforts to respond effectively to changing market conditions and customer demands. 

Economists Predict Expansion Will Last into 2018

The World Bank forecasts global economic growth to edge up to 3.1% in 2018 after a much stronger-than-expected 2017, as the recovery in investment, manufacturing and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

Growth in advanced economies is expected to moderate slightly to 2.2% in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off. Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5% in 2018, as activity in commodity exporters continues to recover. 

Philly Fed Manufacturing Index at 5-Month Low

The Philadelphia Fed’s monthly index for current manufacturing activity in the region decreased from a revised reading of 27.9 in December to 22.2 in January. Although now at its lowest reading in five months, the index has stayed within a relatively narrow range over the past eight months. The other broad indicators continue to suggest overall growth. The shipments index remained at a high reading and increased 6 points. The index for current new orders, however, decreased 18 points. Nearly 36% of the firms reported an increase in new orders this month, but 26% reported declines. Both the delivery times and unfilled orders indexes decreased this month: The unfilled orders index was negative for the first time in 16 months, and the index of delivery times fell to its lowest reading in 10 months. 

U.S. Industrial Output Rose 0.9% in December

Industrial production rose 0.9% in December even though manufacturing output only edged up 0.1%. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2% at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5% of its 2012 average, the index has increased 3.6% since December 2016 for its largest calendar-year gain since 2010.The gain in manufacturing output in December was its fourth consecutive monthly increase. 

Beige Book: Modest to Moderate Growth Prevalent Across U.S.

According to the Federal Reserve Beige Book, reports from the 12 districts indicated that the economy continued to expand from late November through the end of the year, with 11 districts reporting modest to moderate gains and Dallas recording a robust increase. The outlook for 2018 remains optimistic for a majority of contacts across the country.

In general, manufacturing respondents continued to have a broadly positive outlook. No contacts expected the just-passed tax reform package to have a big effect on investment. 



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