PMA Reports Business Conditions Steady in January 2008

     According to the January 2008 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect business conditions to remain steady over the next three months despite low shipping levels.  The monthly report samples economic information from 159 metalforming companies in the United States and Canada.

When asked what they expect the trend in general economic activity to be over the next three months, 20 percent of participants reported that conditions will improve, 50 percent anticipate activity will remain the same and 30 percent expect a decline in business conditions.  These same percentages were reported in December 2007.

Metalforming companies also expect little change in their incoming orders over the next three months.  Thirty-one percent of companies predict an increase in orders (down from 33 percent in December), 44 percent anticipate no change (compared to 37 percent last month) and 25 percent forecast a decrease in orders (down from 30 percent in December). 

Current average daily shipping levels, however, plummeted in January to their lowest levels since January 2002.  Only 13 percent of companies reported that current shipping levels are above levels of three months ago (compared to 24 percent in December), 43 percent reported no change (the same percentage reported last month) and 44 percent reported that January shipping levels are below levels of three months ago (up from 33 percent in December). 

The number of metalforming companies with a portion of their workforce on short time or layoff fell to 14 percent in January, down from 18 percent in December. 

“PMA member companies are reflecting overall economic uncertainty in their projections for the first quarter of 2008, especially compared to their outlook one year ago, in January 2007, which was decidedly more positive than it is today,” says William E. Gaskin, PMA president. 

“While daily shipping levels at year-end fell sharply, expectations for incoming new orders over the next three months remain positive, with 75 percent expecting higher or at least similar levels of customer orders as received in the fourth quarter of 2007.  Profits in 2008 will be challenged by constant price pressure from customers and rising steel and energy costs.”

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Precision Metalforming Association