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Metal formers expect business conditions to remain fairly steady over next three months

According to the February 2010 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect conditions to remain fairly steady over the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 124 metal forming companies in the United States and Canada.

The February report shows that 45 percent of participants expect an improvement in economic activity during the next three months (the same percentage reported in January), 49 percent predict that activity will remain unchanged (up from 45 percent last month) and only 6 percent report that activity will decline (down from 10 percent in January).

Metal forming companies also forecast steady incoming orders during the next three months. Increased orders are anticipated by 54 percent (up from 52 percent in January), 32 percent expect no change (compared to 38 percent the previous month) and 14 percent predict a decrease in orders (up from 10 percent in January).

Current average daily shipping levels spiked in February with more than half of responding companies indicating that their shipments increased. Fifty-one percent of participants report that shipping levels are above levels of three months ago (up from 33 percent in January), 34 percent report no change (compared to 53 percent in January) and 15 percent reported that shipping levels are below levels of three months ago (up from 14 percent in January).

The number of metal forming companies with a portion of their workforce on short time or layoff dropped to 47 percent in February, down from 52 percent in January. While the continued downward trend in percent of companies with people on layoff or short time is positive, it may be masking the fact that many companies have decided that the smaller number of employees they had as of Fall 2009 is the "new normal," meaning that they do not consider those that previously left on layoff any longer.

"February's Business Conditions Report continues to reflect improved orders and shipments among metalforming companies," said William E. Gaskin, PMA president. "Some 86 percent of respondents expect incoming orders for the next three months to be higher or equal to current levels and 85 percent expect shipments to be higher or equal to shipments over the past three months. Anecdotal reports from member companies indicate that many companies are recalling at least part of the workforce they had laid off during 2009."