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Growing concern about lead times dampens metal formers’ outlook, says report
- May 25, 2021
- News Release
- Shop Management
Metal forming companies forecast a dip in business conditions through August amid continued supply challenges and increased lead times for steel and other materials, according to the May 2021 Precision Metalforming Association (PMA) Business Conditions Report. Prepared monthly, the report provides an economic indicator for manufacturing, sampling 101 metal forming companies in the U.S. and Canada.
After two months of showing increased optimism, PMA’s May report shows that only 41% of metal forming companies forecasted an improvement in economic activity in the next three months (compared to 56% in April), 49% predicted no change (compared to 37% in April), and 10% anticipated a decline in activity (up from 7% in April).
The May report indicates that lead times continue to increase. When asked about lead times compared to the previous three months, 71% of respondents said that they have increased, up from 64% in April. Increases have continued each month since September 2020, when only 16% reported increased lead times.
“The May report reflects what I have been hearing from members during my visits to their facilities across the country: There are substantial challenges in finding steel and other raw materials needed to meet growing demand,” said PMA President David Klotz. “Our members continue to report high prices and increased lead times for steel, aluminum, copper, brass and other metals. PMA calls on the Biden administration to terminate the Section 232 steel and aluminum tariffs, which no longer are needed and are one of the main causes for the supply problems experienced by our members. In addition, members also report that the semiconductor shortage that has resulted in the idling of some auto plants [is] beginning to negatively impact orders.”
Current average daily shipping levels decreased in May, with 60% reporting an increase (down from 72% in April), 30% reporting no change (compared to 23% last month), and 10% reporting a decrease (up from 5% in April).
The survey also revealed an expectation that incoming orders will decline somewhat in the next three months, with 42% forecasting an increase in orders (down from 58% in April), 44% predicting no change (compared to 33% last month), and 14% anticipating a decrease in orders (compared to 9% in April).
Four percent of responding metal forming companies had a portion of their workforce on short time or layoff in May, an increase from only 1% in April.
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The Fabricator is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The Fabricator has served the industry since 1970.
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