Metal formers expect business conditions to improve

Metal forming companies expect a substantial improvement in business conditions during the next three months, according to the Jan. 1, 2007, Precision Metalforming Association (PMA) Business Conditions Report. Conducted monthly, the report is an economic indicator for manufacturing, sampling 172 metal forming companies in the U.S. and Canada.

When asked what they expect the trend in general economic activity to be over the next three months, 27 percent of participants reported that conditions will improve (up from 19 percent in December), 55 percent predict activity will remain the same (compared to 51 percent the previous month) and only 18 percent forecast a decline in business conditions (down from 30 percent in December).

The number of metal forming companies with a portion of their workforce on short time or layoff decreased to 15 percent in January, down slightly from December when 16 percent reported having workers on short time or layoff.

Current average daily shipping levels compared to the past three months remained steady in January. Twenty-three percent of companies reported that shipping levels are above levels of three months ago (up from 18 percent in December), 37 percent reported no change (compared to 43 percent in December) and 40 percent reported that January shipping levels are below levels of three months ago (compared to 39 percent last month).

"PMA's orders and shipments data for 2006 indicates that many metal forming companies experienced a fairly strong year, at least until the fourth quarter when automotive, construction and truck-related customers began to scale back orders," said William E. Gaskin, PMA president. "At a recent 2007 business forecast roundtable, PMA members predicted that the first three to six months of 2007 would be flat or show only modest increases in shipments, but there clearly was an expectation that orders would grow in the second half of the year. This appears consistent with general economic forecasts that project a slow start to 2007, but then overall GDP growth of 2.3 to 2.8 percent for the full year," he noted.