Metalforming companies expect business conditions to remain fairly steady

Source: PlantServices.com

Sep 20, 2010

Business Conditions Report: August 2010

According to the August 2010 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect business conditions to remain fairly steady during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 130 metalforming companies in the United States and Canada.

The August report shows that 25% of participants anticipate an improvement in economic activity during the next three months (up from 23% in July), 58% predict that activity will remain unchanged (down from 61% last month) and 17% report that activity will decline (up from 16% in July).

More than one-third of metalforming companies forecast increased orders for the next three months. Thirty-eight percent of participants expect an increase in orders (up from 29% in July), 44% anticipate no change (compared to 51% last month) and 18% predict a decrease in orders (down from 20% in July).

However, the percentage of companies reporting decreased shipping levels grew in August. Only 22% of participants report that average daily shipping levels are above levels of three months ago (down from 34% in July), 41% report no change (compared to 54% in July) and 37% report that shipping levels are below levels of three months ago (up significantly from 12% in July).

The percentage of metalforming companies with a portion of their workforce on short time or layoff dropped to 22% in August from 27% in July. This marks the lowest level since May 2008.

“Metalforming companies experienced strong increases in orders and shipments during the first half of 2010 from the very low levels of 2009,” said William E. Gaskin, PMA president. “While the typical company now has experienced 12 months of new orders and 11 months of shipments above their 12-month rolling average, PMA’s August report indicates a cautious outlook for shipments during the next several months. However, the report also reflects that expectations for new orders into the third quarter are fairly strong, with 82% expecting orders at the same or higher levels for the next three months.”

Gaskin also noted that the recent surge in imported manufactured products from China were a growing concern among PMA member companies. He called on Congress and the Administration to act swiftly to mandate that China accelerate market adjustments of the value of its currency, allowing the value of the yuan to adjust against the dollar based on market factors.

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