November 20, 2008
According to the November 2008 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect business conditions to continue to deteriorate during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 157 metal forming companies in the United States and Canada.
When asked what the trend in general economic activity will be during the next three months, metal formers anticipate worsening conditions. Seventy percent of participants reported that activity will decline (up from 67 percent in October), 27 percent predict activity will remain unchanged (compared to 26 percent last month) and only three percent forecast an improvement in business conditions (down from seven percent in October).
Metal forming companies also expect incoming orders to continue to drop over the next three months. Sixty-seven percent of companies anticipate a decrease in orders (up from 54 percent in October), 24 percent expect no change (down from 34 percent the previous month) and only nine percent forecast an increase in orders (compared to 12 percent in October).
Current average daily shipping levels dropped substantially in November. Fifty-nine percent of participants report that shipping levels are below levels of three months ago (up drastically from 38 percent in October), 31 percent report no change (down from 45 percent last month) and 10 percent report that shipping levels are above levels of three months ago (down from 17 percent in October).
The number of metal forming companies with a portion of their work force on short time or layoff spiked to 42 percent in November—up from 30 percent in October and at a substantially higher rate than November 2007, when only 13 percent of companies reported workers on short time or layoff.
"The outlook for business conditions for the last two months of 2008 and the beginning of 2009 continues to deteriorate, as reported by PMA members in the November Business Conditions Survey," noted William E. Gaskin, president. "While there are a few pockets of strength, the general weakness of the manufacturing sector, led by severe cutbacks in domestic automotive production, is driving the negative outlook. Hopefully, efforts to stimulate the economy and address the underlying credit crisis causing consumers to restrain spending on big-ticket items will be successful during the months ahead."