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Metal formers see no change in next three months

Metal forming companies expect business conditions to remain virtually unchanged during the next three months, according to the November 1, 2006 Precision Metalforming Association (PMA) Business Conditions Report. Conducted monthly, the report is an economic indicator for manufacturing, sampling 157 metal orming 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, 18 percent of participants reported that economic activity will improve (up from 17 percent in October), 38 percent believe conditions will worsen (up from 36 percent last month) and 44 percent predict economic activity will remain the same (compared to 47 percent in October).

Metal forming companies also expect incoming orders to remain stable during the next three months. Twenty-seven percent of respondents predict an increase in orders (up from 24 percent in October), 41 percent anticipate a decrease in orders (compared to 40 percent last month), and 32 percent forecast no change (down from 36 percent in October).

Current average daily shipping levels remained steady in November as well. Twenty-three percent of companies reported that shipping levels are above levels of three months ago (up from 21 percent the previous month), 42 percent reported no change (compared to 46 percent in October) and 35 percent reported that November shipping levels are below levels of three months ago (up from 33 percent last month).

The number of metal forming companies with a portion of their work force on short time or layoff decreased to 16 percent in November, down slightly from October when 17 percent reported having workers on short time or layoff.

"Fourth quarter shipping levels of many metal forming companies have declined due to production cutbacks in the automotive industry," said William Gaskin, PMA president. "Of more concern is the continued lack of optimism for early 2007, as expressed by the 38 percent that believe the general economic trend will be lower over the next three months and the 41 percent who reported that their expectations for incoming orders for November through January will be lower than over the past three months. A more typical situation is that expectations for new orders and general economic growth in January would result in a more positive outlook in our November report."