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Metal forming companies anticipate little change in next three months

According to the August 2008 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies anticipate little change in business conditions 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.

When asked what the trend in general economic activity will be during the next three months, metal formers expect a slight improvement. Twenty percent of participants reported that activity will improve (up from 17 percent in July), 52 percent predicted activity will remain unchanged (compared to 48 percent last month), and 28 percent forecast a decline in business conditions (down from 35 percent in July).

Current average daily shipping levels remained virtually unchanged in August. Nineteen percent of participants reported that shipping levels are above levels of three months ago (the same percentage reported in July), 42 percent reported no change (up from 40 percent last month), and 39 percent reported that shipping levels are below levels of three months ago (compared to 41 percent in July).

Metal forming companies also expect little change in incoming orders during the next three months. Twenty-nine percent of companies predict an increase in orders (up from 27 percent in July), 42 percent anticipate no change (down from 43 percent the previous month) and 29 percent forecast a decrease in orders (compared to 30 percent in July).

However, the number of metal forming companies with a portion of their workforce on short time or layoff climbed to 25 percent in August compared to 17 percent in July.

"Metal forming companies anticipate unusually soft incoming orders for the next three months and hold lower than normal expectations for general economic conditions," according to William E. Gaskin, PMA president. "PMA's August Business Conditions Report, based on data gathered the first week of August, normally documents higher expectations for improved orders, shipments and general economic conditions as summer vacations wind down and production picks up for the fall," he observed, "but this year appears to be softer than normal, with reduced volumes for suppliers to the automotive, appliance and home-building industries."