Quality Magazine

Metalforming Industry Expects Slight Increase in Business

January 27, 2009

CLEVELAND, OH-According to the January 2009 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a slight uptick in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 163 metalforming companies in the United States and Canada.

When asked what the trend in general economic activity will be during the next three months, metalformers anticipate a modest improvement. Fourteen percent of participants predict an improvement in business, up from 6% in December, 41% expect that activity will remain unchanged, up from 31% last month, and 45% reported that activity will decline, down from 63% in December.

Metalforming companies also anticipate that incoming orders will improve somewhat during the next three months. Nineteen percent of companies forecast an increase in orders, up from 11% in December, 32% expect no change, compared to 30% the previous month, and 49% predict a decrease in orders, down from 59% in December.

Current average daily shipping levels remained unchanged in January. Seventy-nine percent of participants report that shipping levels are below levels of three months ago, while 17% report no change and only 4% report that shipping levels are above levels of three months ago-the exact percentages reported in December.

Despite anticipation that business conditions will improve slightly during the next three months, the number of metalforming companies with a portion of their workforce on short time or layoff spiked to 64% in January-up from 54% in December and at a substantially higher rate than January 2008, when only 14% of companies reported workers on short time or layoff.

"The metalforming industry relies on orders for components and assemblies by customers in many industries, including automotive, appliance, construction, electronics, defense, agriculture, off-highway and other markets, nearly all of which are suffering significant production cutbacks," says William E. Gaskin, president of Precision Metalforming Association.

"Survey results show that one-third expect orders to be flat and nearly half expect orders to continue to decline. The financial viability of many companies is at risk," Gaskin says. "PMA supports quick action by the Obama administration and the 111th Congress on a meaningful stimulus plan which should include tax incentives for capital investment, and increasing the availability of loans for manufacturers to boost consumer confidence. President-elect Obama and Congress must recognize the importance of manufacturing jobs to the future of the U.S. economy and quickly address tax, labor, energy, environmental and job training policies needed for a robust manufacturing sector.”

Full report results are available at www.pma.org/about/stats/BCreport.