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Metal forming companies expect continued strengthening in business conditions

According to the July 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect continued strengthening in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 131 metal forming companies in the United States and Canada.

The July report shows that metal formers are feeling more optimistic about general economic activity than they have since April 2006. Thirty-seven percent of participants predict an improvement in overall economic activity (up from 21 percent in June), 47 percent expect that activity will remain unchanged (compared to 58 percent last month) and 16 percent report that activity will decline (compared to 21 percent in June).

Metalforming companies also anticipate an improvement in incoming orders during the next three months. Forty-six percent predict an increase in orders (up from 29 percent in June), 39 percent expect no change (down from 46 percent the previous month), and only 15 percent of companies forecast a decrease in orders (compared to 25 percent in June).

Current average daily shipping levels also increased in July. Thirty-one percent of participants reported that shipping levels are above levels of three months ago (compared to 14 percent in June), 32 percent reported no change (down from 37 percent in June) and 37 percent reported that shipping levels are below levels of three months ago (down from 49 percent reported last month).

The number of metal forming companies with a portion of their workforce on short time or layoff remained steady at 81 percent in July—the same percentage reported in June. This level remains at a substantially higher rate than July of last year, when only 17 percent of companies reported workers on short time or layoff.

"PMA members are reporting that there are positive signs of stronger business conditions," said William E. Gaskin, PMA president. "Customer markets such as automotive, truck, appliance, and construction are all still very soft, but the July data confirms that a bottom has been reached for many members and their expectations for the next three months are the most positive that we have seen in a year. Certainly the metal forming industry is not yet in full recovery, but this month's data is hopefully the beginning of a positive trend."