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Metal formers expect somewhat weaker business conditions during next three months

According to the September 2008 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect business conditions to weaken somewhat during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 164 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 a slight decline. Only 16 percent of participants report that activity will improve (down from 20 percent in August), 53 percent predict activity will remain unchanged (compared to 52 percent last month) and 31percent forecast a decline in business conditions (up from 28 percent in August).

Metal forming companies also expect a drop in incoming orders during the next three months. Thirty-two percent of companies anticipate a decrease in orders (up from 29 percent in August), 41 percent expect no change (down from 42 percent the previous month) and 27 percent forecast an increase in orders (compared to 29 percent in August).

Current average daily shipping levels remained steady in September. Twenty percent of participants report that shipping levels are above levels of three months ago (up from 19 percent reported in August), 42 percent report no change (the same percentage reported last month) and 38 percent report that shipping levels are below levels of three months ago (compared to 39 percent in August).

The number of metal forming companies with a portion of their workforce on short time or layoff increased to 26 percent in September—up from 25 percent in August and at its highest level since July 2003 when 28 percent of companies reported workers on short time or layoff.

"Increased economic uncertainty in the credit and financial markets are having an impact on PMA members, giving them less confidence that there will be any rebound in orders and shipments in the 4th quarter," said William E. Gaskin, PMA president. "Automotive, housing-related, and appliance markets are all projecting lower production levels for the months ahead. While there are pockets of business growth, especially in lower volume production using fabricating and laser technologies, many longer-run production companies are anticipating a very soft 4th quarter," he continued.