Biomanufacturing Defies Economic Downturn by Increasing Budgets

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The perceived bleak status of the economy doesn't possess many bright spots. Many economists agree that a robust housing market usually leads the charge for a healthy economy. However, the manufacturing sector, specifically the biomanufacturing segment, seems to be defying tradition and leading the way to a better economic outlook.

The durable goods manufacturing sector displayed strong monthly increases in new orders and actual shipments in July. (See August 25, 2011, article - U.S. Manufactured Durable Goods Orders Increase More Than Expected in July.) Durable goods new orders increased 4%, and actual shipments improved by 2.5%. In 2011, 180,000 new manufacturing jobs were added in first seven months of the year. U.S. manufacturing alone was responsible for approximately 20% of the 930,000 new jobs added so far in 2011. This is an astounding feat, as manufacturing jobs represent less than 9% of the total payroll jobs in the country. A specific subset of the manufacturing economy, biomanufacturing, is challenging not only the overall trends of the economy, but also trends seen in the more mature industries, including pharmaceuticals.

The biomanufacturing sector is shifting its budgetary focus to the improvement of productivity, quality of product and cost control. According to a 31-country survey, representing 352 global manufacturers/CMOs and 186 vendors to the industry, performed by Bioplan Associates (Rockville, Maryland), the most profound budget increase from 2010 to year-to-date 2011 related to these factors was cost control, which had an increase of 11.2% within biomanufacturing industry budgets. Productivity- related budgets are up 3.5% and cost-cutting funding is up slightly with a 0.4% increase.

The biomanufacturing sector is specifically eyeing new technologies (retooling) and training existing staff to improve efficiencies and costs. This is welcome news for the manufacturing support players that provide equipment for the biomanufacturing process. New technologies budgets for biomanufacturing are up approximately 6% from 2010. This bodes well for manufacturers of bioreactors, cleanrooms, manufacturing execution systems, centrifuges and other specialty process equipment manufacturers.

Construction of new biomanufacturing facilities and the expansion of existing plants are also within the budgets of biopharmaceutical producers. Baxter Incorporated (NYSE: BAX) (Deerfield, Illinois) is spending approximately $50 million to add approximately 60,000 square feet of production space to its site in Thousand Oaks, California. Shire plc (NASDAQ:SHPGY) (Basingstoke, England) is putting the finishing touches on the company's approximately $400 million biomanufacturing campus in Lexington, Massachusetts.

It is only natural for companies to hold on to their capital and have a wait-and-see attitude before increasing their budgets in a downturned economy, and the rollercoaster ride of these economic times rivals anything manufactured by Walt Disney. However, companies involved in the biomanufacturing sector seem to see this as an opportunity to rethink strategies, upgrade and increase manufacturing capacity, and streamline operations, rather than let the economy be an obstacle. Attitude is a large part of economics, and it appears that the attitude of the biomanufacturing sector is extremely positive.

View Plant Profile - 1013262 1072537
View Project Report - 300008680 35000912

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.