Report participants anticipate an improvement in economic activity during the next three months


Oct 11, 2010

According to the September 2010 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies continue to expect steady business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 134 metalforming companies in the United States and Canada.

The September report shows that 22% of participants anticipate an improvement in economic activity during the next three months (down from 25% in August), 59% predict that activity will remain unchanged (compared to 58% last month) and 19% report that activity will decline (up from 17% in August).

Metalforming companies forecast a dip in increased orders for the next three months. Only 26% of participants expect an increase in orders (down from 38% in August), 49% anticipate no change (compared to 44% last month) and 25% predict a decrease in orders (up from 18% in August).

However, average daily shipping levels improved in September. Forty percent of participants report that average daily shipping levels are above levels of three months ago (up from 22% in August), 39% report no change (compared to 41% in August) and only 21% report that shipping levels are below levels of three months ago (down from 37% in August).

The percentage of metalforming companies with a portion of their workforce on short time or layoff dropped to 19% in September from 22% in August. This number is significantly lower than it was one year ago when 68% of companies had workers on short time or layoff.

“After a very significant recovery in orders and shipments for the first eight months of 2010 compared to 2009, PMA’s manufacturing members are increasingly cautious as the end of the 3rd quarter draws near,” said William E. Gaskin, PMA president. “Based on information from the 100-company control group, which is a key component of PMA’s Monthly Orders and Shipments Survey, for the first eight months of 2010, the average control group company reported year-to-date 2010 orders and shipments that were up 50% and 42% compared with 2009 levels. Certainly that level of recovery speaks to very poor business conditions in 2009, however it also supports the leading role that manufacturing has taken in an otherwise soft economic recovery. PMA urges the U.S. Congress to act quickly to resolve tax issues such as making permanent the R&D Tax Credit, to not raise income taxes on the 60 percent of PMA member companies who operate as Sub-S and LLC entities, and to quickly pass the Small Business Jobs Act, which would help free up new sources of credit for the small/middle-market manufacturers who are struggling with restricted credit lines and limited access to capital they need to expand their business.”