Metal forming companies expect sluggish activity during next three months

According to the March 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies expect continued difficult conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 160 metal forming companies in the United States and Canada.

Metal formers anticipate general economic activity will remain sluggish during the next three months. Thirteen percent of participants predict an improvement in overall economic activity (up from nine percent in February), 39 percent expect that activity will remain unchanged (down from 48 percent last month) and 48 percent reported that activity will decline (compared to 43 percent in February).

Current average daily shipping levels improved slightly in March. Seventy-three percent of participants reported that shipping levels are below levels of three months ago (compared to 79 percent in February), 18 percent reported no change (up from 14 percent in February) and nine percent reported that shipping levels are above levels of three months ago (up from seven percent last month).

Metal forming companies anticipate that incoming orders will increase somewhat during the next three months. Twenty-four percent of companies forecast an increase in orders (up from 16 percent in February), 35 percent expect no change (compared to 34 percent the previous month) and 41percent predict a decrease in orders (down from 50 percent in February).

The number of metal forming companies with a portion of their work force on short time or layoff remained steady in March. Seventy-six percent of companies reported workers on short time or layoff in March, compared to 75 percent in February. This level remains at a substantially higher rate than one year ago, when only 19 percent of companies reported workers on short time or layoff.

"The outlook for orders and shipping levels is only marginally improved in March compared with February," commented PMA President William E. Gaskin. "There is little reason to believe that a sharp uptick in business levels is likely during the next few months. Credit markets remain weak and demand for housing, automobiles, and industrial and consumer products continues to be very soft. A large segment of the metal forming industry is on pins and needles waiting to learn whether the Automotive Task Force, which is advising the U.S. Treasury Department, will support additional financial help for General Motors and/or Chrysler and whether the liquidity needs of automotive suppliers, especially Tier 2 and Tier 3 middle-market companies, will be addressed by any additional forthcoming assistance."