Metalforming Companies Expect Business Conditions to Decline

According to the November 2011 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies predict a cont...


According to the November 2011 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies predict a continued decline in business conditions during the next three months.  Conducted monthly, the report is an economic indicator for manufacturing, sampling 132 metalforming companies in the United States and Canada. The November report shows that only 11 percent of participants expect economic activity to improve during the next three months (down from 20 percent in October), 61 percent predict that activity will remain unchanged (compared to 56 percent last month) and 28 percent report that activity will decline (up from 24 percent in October).

Metalforming companies also expect a slight decrease in incoming orders during the next three months, with only 21 percent anticipating an increase in orders (down from 26 percent in October), 49 percent forecasting no change (compared to 45 percent last month) and 30 percent predicting a decrease in orders (up slightly from 29 percent in October).

Average daily shipping levels decreased in November. Twenty-seven percent of participants report that shipping levels are above levels of three months ago (down from 38 percent in October), 47 percent report that shipping levels are the same as three months ago (compared to 44 percent last month), and 26 percent report a decrease in shipping levels (compared to 18 percent in October).

The percentage of metalforming companies with a portion of their workforce on short time or layoff spiked to 17 percent in November, up from eight percent in October. This number is comparable to last November, when companies reported 15 percent of their workforce on short time or layoff.

"PMA members are signaling caution regarding the general economy, most likely because it continues to be impacted by political dysfunction with the deficit committee deadlocked and apparently ready to allow action on the U.S. deficit to be a 2012 campaign issue, rather than addressing it in a timely manner," said William E. Gaskin, PMA president. "However, year-to-date, the typical PMA member reports 12 percent growth in shipments for the first nine months compared to 2010 and most expect similar growth in 2012. Housing starts have been at an annual rate of more than 600,000 units for four of the past five months, manufacturing output grew by 0.5 percent in October and inventories remain lean. PMA's November Business Conditions report indicated that while expectations for current shipping levels softened somewhat, expectations are still more positive than they were in November 2010."

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