Metal forming companies expect business conditions to dip in next three months; however, conditions show considerable improvement from last year

According to the November 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies anticipate a dip in business conditions and incoming orders. Conducted monthly, the report is an economic indicator for manufacturing, sampling 137 metal forming companies in the United States and Canada.

The November report shows that metal formers expect general economic activity to decline during the next three months. Twenty-seven percent of participants forecast an improvement in overall economic activity (down from 30 percent in October), 48 percent predict that activity will remain unchanged (compared to 54 percent last month) and 25 percent report that activity will decline (up from 16 percent in October).

The percent of metal forming companies forecasting a decrease in incoming orders during the next three months rose from 22 percent in October to 31 percent in November. Increased orders are expected by 31 percent (down from 38 percent in October), and 38 percent anticipate no change (down from 40 percent the previous month). By comparison, last year at this time, 67 percent of members reported declining orders.

Current average daily shipping levels remained steady for the third month in a row. Fifty-three percent of participants report that shipping levels are above levels of three months ago (compared to 54 percent in October), 32 percent report no change (compared to 31 percent in October) and 15 percent report that shipping levels are below levels of three months ago (the same percentage reported last month). In contrast, one year ago, daily shipping levels were declining rapidly, with 59 percent of members reporting declines.

The number of metal forming companies with a portion of their work force on short time or layoff decreased to 56 percent in November, down from 60 percent in October. One year ago, layoffs were starting to rise dramatically and eventually peaked at 85 percent in April 2009.

"Business conditions being reported by PMA members are consistent with the uncertainties most manufacturers are facing. They are unsure whether the recent rebound in orders and shipments will continue at current or higher levels, or whether they will decline as we approach year-end and early 2010," said William E. Gaskin, PMA president. "Compared with one year ago, the outlook for the metal forming industry is very positive. However, one issue of growing concern is the ability for companies, whose profitability has been temporarily impaired by the recession, to access the credit they need to finance growth. PMA has been working with members of Congress, the Small Business Administration and the White House to develop solutions to this growing problem."