Metal forming companies expect little change in next three months

According to the May 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect business conditions to remain virtually unchanged during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 142 metal forming companies in the United States and Canada.

Metal formers anticipate general economic activity will decrease somewhat during the next three months. Nineteen percent of participants predict an improvement in overall economic activity (the same percentage reported in April), 46 percent expect that activity will remain unchanged (down from 54 percent last month) and 35 percent reported that activity will decline (up from 27 percent in April).

Metalforming companies also anticipate a slight decline in incoming orders during the next three months. Thirty-nine percent predict a decrease in orders (up from 31 percent in April), 36 percent expect no change (down from 45 percent the previous month), and 25 percent of companies forecast an increase in orders (compared to 24 percent reported in April).

However, current average daily shipping levels improved somewhat in May. Seventeen percent of participants report that shipping levels are above levels of three months ago (compared to 12 percent in April), 34 percent report no change (up from 26 percent in April) and 49 percent report that shipping levels are below levels of three months ago (down from 62 percent last month).

The number of metal forming companies with a portion of their workforce on short time or layoff decreased to 80 percent in May, down from 85 percent in April. This marks the first time since last summer that there has been a decrease—the number of companies with workers on short time or layoff had steadily increased from 17 percent in July 2008 to its peak of 85 percent in April 2009.

"Orders and shipments in the metal forming industry generally slow down somewhat over the summer months, due to vacations and model changeovers in several markets, and this year is no exception," commented PMA President William E. Gaskin. "What is different this year is that significant portions of the automotive supply chain are operating at very low volumes and soft business conditions continue in virtually every other market as well. While there are some early indicators of economic recovery, it is likely to be the fourth quarter of 2009 before there is a start of a modest recovery, with the first quarter of 2010 likely to be the first sign of significant improvement for most companies."