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Optimism rises among metal forming companies

According to the April 2009 Precision Metalforming Association (PMA) Business Conditions Report, metal forming companies are the most optimistic they have been about business conditions since last summer. Conducted monthly, the report is an economic indicator for manufacturing, sampling 155 metal forming companies in the United States and Canada.

Metal formers anticipate general economic activity will improve somewhat during the next three months. Nineteen percent of participants predict an improvement in overall economic activity (up from 13 percent in March), 54 percent expect that activity will remain unchanged (up from 39 percent last month) and only 27 percent reported that activity will decline (compared to 48 percent in March).

Metal forming companies also anticipate an improvement in incoming orders during the next three months. Only 31 percent predict a decrease in orders (down from 41 percent in March), 45 percent expect no change (compared to 35 percent the previous month), and 24 percent of companies forecast an increase in orders (the same percentage reported in March).

Current average daily shipping levels improved in April as well. Sixty-two percent of participants report that shipping levels are below levels of three months ago (compared to 73 percent in March), 26 percent report no change (up from 18 percent in March) and 12 percent report that shipping levels are above levels of three months ago (up from nine percent last month).

Despite metal formers' growing optimism, the number of metal forming companies with a portion of their work force on short time or layoff increased to 85 percent in April, up from 76 percent in March.

"It is encouraging to see the first indications of improving business conditions from PMA's manufacturing members," said William E. Gaskin, PMA president. "However, it is important to note that recovery in metal forming markets will be slow, as indicated by expectations for incoming orders for the next three months. While 24 percent look for rising orders, 45 percent predict flat order books and nearly one-third (31 percent) still expect new orders to decline from current levels," Gaskin noted.