Metal formers weigh in on business conditions for next three months

According to the February 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect tough times to continue during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 147 metal forming companies in the United States and Canada.

Metal formers anticipate a slight decline in general economic activity during the next three months. Only nine percent of participants predict an improvement in business (down from 14 percent in January), 48 percent expect that activity will remain unchanged (up from 41 percent last month) and 43 percent reported that activity will decline (compared to 45 percent in January).

Metal forming companies also anticipate that incoming orders will decrease during the next three months. Only 16 percent of companies forecast an increase in orders (down from 19 percent in January), 34 percent expect no change (compared to 32 percent the previous month) and 50 percent predict a decrease in orders (up from 49 percent in January).

Current average daily shipping levels remained steady in February. Seventy-nine percent of participants report that shipping levels are below levels of three months ago (the same percentage reported in January), 14 percent report no change (compared to 17 percent in January) and seven percent report that shipping levels are above levels of three months ago (up from four percent last month).

The number of metal forming companies with a portion of their workforce on short time or layoff increased for the seventh consecutive month. Seventy-five percent of companies reported workers on short time or layoff in February, compared to 64 percent in January and at a substantially higher rate than February 2008, when only 16 percent of companies reported workers on short time or layoff.

"As producers of components and assemblies for a wide range of commercial, industrial and consumer goods, metal forming companies are dependent on their customers to drive orders and shipments," said William E. Gaskin, PMA president. "Virtually every sector of our manufacturing base, with the possible exception of defense industries, is experiencing substantial cutbacks in production, impacting the outlook for the metal forming industry into the spring. PMA member companies are directly hurt by the credit crisis in obtaining resources to survive this prolonged economic slump, and indirectly as consumer spending and the housing collapse impact purchases of autos, appliances and other products. It is an amazing tribute to the resiliency of small and middle-market companies that they have been able to reduce costs and hunker down to survive this difficult period."