Quality Magazine

Metalforming Companies Anticipate DOWNTURN

December 1, 2005

CLEVELAND-Metalforming companies are anticipating a downturn in near-term business conditions, according to the September 2005 Precision Metalforming Association (PMA) Business Conditions Report. Conducted monthly, the report is an economic indicator for manufacturing, sampling 177 metalforming companies in the United States and Canada.

When asked what they expect the trend in general economic activity to be during the next three months, only 25% of participants reported that business conditions will improve, down from 42% in August, 52% believe conditions will remain the same and 23% anticipate economic activity will decrease, compared to 10% the previous month. These views may be a reflection of the economic uncertainty in the aftermath of Hurricane Katrina.

Metalforming companies also expect incoming orders to decline during the next three months. Forty-one percent of respondents expect an increase in orders, compared to 53% in August, and 39% predict no change, up from 36% the previous month. Twenty percent forecast a decrease in orders, up from 11% in August.

However, participants reported that current average daily shipping levels are above those of the previous three months. Thirty-six percent of companies reported that shipping levels are up, compared to 25% the previous; 42% reported no change, the same percentage reported in August; and 22% reported that September shipping levels are below levels of three months prior, compared to 33% in August.

On another positive note, the number of metalforming companies with a portion of their workforce on short time or layoff dropped for the second consecutive month. Just 14% of companies reported workers on short time or layoff in September, compared to 17% in August and 19% in July.

The monthly Business Conditions report has been conducted by PMA since 1979. Full report results are available at www.metalforming.com.