Metal forming companies expect business conditions to remain fairly steady during next three months

According to the December 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect business conditions to remain fairly steady during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 130 metal forming companies in the United States and Canada.

The December report shows that metal formers forecast little change in general economic activity for the first quarter of 2010. Twenty-eight percent of participants expect an improvement in economic activity (up from 27 percent in November), 50 percent predict that activity will remain unchanged (compared to 48 percent last month) and 22 percent report that activity will decline (down from 25 percent in November).

Metal forming companies anticipate a slight uptick in incoming orders during the next three months. Increased orders are expected by 35 percent (up from 31 percent in November), 40 percent expect no change (compared to 38 percent the previous month) and 25 percent predict a decrease in orders (down from 31 percent in November).

However, the outlook for current average daily shipping levels compared to three months ago dropped in December after three months of steady shipments. Only 37 percent of participants report that shipping levels are above levels of three months ago (down from 53 percent in November), 36 percent report no change (compared to 32 percent in November) and 27 percent reported that shipping levels are below levels of three months ago (up from 15 percent in November).

The number of metal forming companies with a portion of their workforce on short time or layoff remained unchanged in December. Fifty-six percent of companies reported workers on short time or layoff this month—the same percentage reported in November.

"After three months where shipping levels for member companies have been increasing, the majority are experiencing a modest slowdown in December," according to Bill Gaskin, PMA president. "Average orders and shipments of member companies were above the 12-month rolling average for two consecutive months, in September and October, and we anticipate that November's results (to be released on December 21) will be above the trend line as well. It appears that December's pullback is moderate, and the outlook for incoming orders for the first quarter is positive, with 75percent of members expecting order books to grow or at least be constant. While the economic recovery in the metal forming industry is not robust, it is positive in most sectors."