The precision machining industry is known to the statisticians in Washington, D.C. as NAICS 332721: Precision Machining. Precision machining is defined this way: “This U.S. industry comprises establishments known as precision turned manufacturers primarily engaged in machining precision products of all materials on a job or order basis. Generally precision turned product jobs are large-volume using machines such as automatic screw machines, rotary transfer machines, computer numerically controlled (CNC) lathes or turning centers.”
The last year for which the U.S. Census shows data for our industry
is 2006. That year, there were 2,528 firms and 2,582 establishments. The figures tell us there are few multi-site precision machining companies in the United States.
We are reminded of Andrew Carnegie’s statement, “The wise man puts all of his eggs in one basket and watches the basket.” From the difference between firms and establishments, our precision machining industry would seem to have taken Carnegie’s advice to heart.
This industry employed 76,640 men and women to make highly engineered, precision products in 2006. Our products typically are components of some other device (like a car, airplane, satellite, appliance or cell phone). They are not finished products that you would expect to buy at a store. Our parts are the technologies that make the other technologies work. That’s because we can produce to high precision and in the needed quantities.
The 2006 Census data shows that 54.9 percent of all firms in this industry had fewer than 20 employees. There were 372 firms of four employees or fewer, or 14.7 percent of all industry firms. More than one-third of the industry firms (34.5 percent) had nine employees or fewer. At the other end of the scale, the data show that 20 firms reported 2,500 employees or more.
Firms with at least 20 employees but fewer than 100 (841 firms) were the largest employment size category, with 33.3 percent of all firms in the industry. More than half of the firms in our industry (1,504 firms or 54.9 percent) had fewer than 20 employees.
Further examination of the 2006 employee data shows that 38 percent of all employees work in firms of 100 employees or more. Sixty-two percent of all employees in the industry are at firms of fewer than 100.
Firms with 20-99 employees account for 45 percent of industry employment, while those with 100-499 workers account for 27.8 percent.* This tells me why we often call our industry “production machining.” Those large numbers of employees-per-firm imply large volumes of highly engineered, precision machined products.
What is the bottom line for this industry? The latest data for Value of Product Shipments of NAICS 332721 is for 2005. The precision machining industry
created $9,791,795,000 of product shipments that year.
So, precision machining is a $9.8-billion industry. Where did those products ship? The annual Survey of Manufacturers Value of Product Shipments 2005
Report shows automotive at $2,368,495,000 in shipments or 24 percent of the industry’s total. Automotive applications include parts for fuel systems, antilock braking, power steering, air conditioning and many other systems.
What about the other 76 percent? Where are those parts? They can be found anywhere — putting the glue on your cereal boxes; dispensing drinks; part of your plumbing, refrigerator or other home appliances; and on heavy construction equipment, trucks, airplanes, spacecraft, satellites and cell phones. Munitions and medical implants are two areas where our products are critical for mission success.
What these numbers say is that precision machined products are about 0.054 percent of U.S. Gross Domestic Product (GDP).
That’s one 20-thousandth of our $18-trillion GDP. That means 76,640 people are making one 20-thousandth of the country’s GDP—parts that make our cars go and stop; parts that safely deliver our electricity; parts that enable
airplanes to fly and the seats to recline; parts that allow our food to be safely prepared; and parts used to maintain and repair our health and bodies.
That’s what the data has to say about the precision machining industry. How can we help you?