Metal forming companies expect business to remain steady in coming months

According to the March 2008 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect business conditions to remain steady during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 143 metal forming companies in the United States and Canada.

When asked what the trend in general economic activity will be over the next three months, metal formers expect little change. Fifty percent of participants reported that activity will remain the same (down from 54 percent in February), 19 percent anticipate that conditions will improve (up from 14 percent last month) and 31 percent predict a decline in business conditions (down from 32 percent in February).

Metal forming companies also expect incoming orders to remain virtually unchanged over the next three months. Thirty percent of companies forecast an increase in orders (compared to 31 percent in February), 42 percent anticipate no change (compared to 39 percent last month) and 28 percent expect a decrease in orders (down from 30 percent in February).

Current average daily shipping levels remain steady as well. In March, 30 percent of participants reported that current average daily shipping levels are above levels of three months ago (up from 29 percent in February), 46 percent reported no change (the same percentage reported last month) and 24 percent reported that shipping levels are below levels of three months ago (down from 25 percent in February).

The number of metal forming companies with a portion of their workforce on short time or layoff rose to 19 percent in March from 16 percent in February.

"Uncertainty over general economic conditions exacerbated by sharp first-quarter cutbacks in housing starts, reduced production volumes for autos and light trucks, and slowing orders for durable goods have impacted many metal forming companies in the first quarter of 2008. This is reflected in their cautious outlook for the next three months," commented William E. Gaskin, PMA president. "However, based on reports from PMA members, the weak dollar is supporting export growth so domestic manufacturing may be stronger than the U.S. media would have us think. While some companies report significant cutbacks, most report stable shipment levels and expect that orders will improve modestly in the second quarter. They are concerned about sharp increases in raw material prices and whether they will be successful in recovering added costs from their customers. And, they are aggressively seeking productivity improvements to increase their efficiencies through automation and capital investment."