Metal forming companies 'at or near bottom' of economic cycle

According to the June 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect little change in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 154 metal forming companies in the United States and Canada.

Metal formers anticipate a slight uptick in general economic activity during the next three months. Twenty-one percent of participants predict an improvement in overall economic activity (up from 19 percent in May), 58 percent expect that activity will remain unchanged (up from 46 percent last month) and 21 percent reported that activity will decline (compared to 35 percent in May).

Metal forming companies also anticipate a slight improvement in incoming orders during the next three months. Twenty-nine percent predict an increase in orders (up from 25 percent in May), 46 percent expect no change (up from 36 percent the previous month), and 25 percent of companies forecast a decrease in orders (compared to 39 percent in May).

However, current average daily shipping levels dipped somewhat in June. Fourteen percent of participants reported that shipping levels are above levels of three months ago (compared to 17 percent in May), 37 percent reported no change (up from 34 percent in May) and 49 percent reported that shipping levels are below levels of three months ago (the same percentage reported last month).

The number of metal forming companies with a portion of their workforce on short time or layoff increased to 81 percent in June, up from 80 percent in May. This level remains at a substantially higher rate than June of last year, when only 23 percent of companies reported workers on short time or layoff.

"PMA members are signaling that the metal forming industry is at or the near bottom of this economic cycle," said William E. Gaskin, PMA president. "The data show that most members are not yet experiencing significant up-side growth in current shipments or in their expectations for incoming orders over the next few months, but they no longer view the situation as deteriorating, although current shipments are softer than one would hope at this stage of the cycle. Nearly one-half of our member companies, primarily suppliers to the automotive, heavy truck and commercial construction industries, are still experiencing unstable current shipping levels, but the situation has improved, and once we get past the June/July closings of automobile assembly facilities, there should be positive yet modest growth in shipments."