Business Conditions Report: July 2012
The July report shows that 19% of participants anticipate economic activity will improve during the next three months (up from 11% in June), 45% predict that activity will remain unchanged (down from 57% last month) and 36% report that activity will decline (compared to 32% in June).
Metalforming companies also forecast a slight increase in incoming orders during the next three months, with 26% anticipating an increase in orders (compared to 15% in June), 40% expecting no change (down from 52% in June) and 34% predicting a decrease in orders (up from 33% last month).
Average daily shipping levels declined somewhat in July. Twenty-six percent of participants report that shipping levels are above levels of three months ago (down from 31% in June), 43% report that shipping levels are the same as three months ago (compared to 39% last month), and 31% report a decrease in shipping levels (up from 30% in June).
The percentage of metalforming companies with a portion of their workforce on short time or layoff decreased to 12% in July, down from 14% in June. The July figure remains more positive than one year ago when 18% of metalformers reported workers on short time or layoff.
“While there is a growing level of uncertainty among many in the metalforming industry, business conditions remain generally positive, with approximately 70% reporting orders and shipments will be the same or higher for the period ahead,” said William E. Gaskin, PMA president. “Economic uncertainties in Europe, slower growth in Asia and political gridlock in the United States are not positive indicators; however, PMA’s member companies have experienced 11% growth in orders and 10% higher shipments for the first half of 2012. There continues to be strong demand for hiring skilled workers, which are in short supply in most areas of the country. If the White House and Congress would come together to address tax issues critical to the future of manufacturing in the United States, such as providing clarity on long-term tax rates for owners of Sub-S companies and reforming corporate tax policy so companies can make long-term decisions in areas such as R&D spending, it would be very helpful to continued economic recovery.”