- 02 May 2008 -
Metalformers Expect Business Conditions to Weaken Over Short Term

Metalforming companies expect business conditions to weaken during the next three months. This news comes from the April 2008 Precision Metalforming Association (PMA) Business Conditions Report, released earlier this week.

When asked what the trend in general economic activity will be over the next three months, metalformers expect a slight decline. Only 14% of participants reported that activity will improve (down from 19% in March), 34% predict a decline in business conditions (up from 31% in March), and 52% expect activity to remain the same (compared to 50% the previous month).

Metalforming companies also expect incoming orders to trend downward over the next three months. Thirty-four percent of companies forecast a decrease in orders (up from 28% in March); 41% anticipate no change (down from 42% last month); and only 25% expect an increase in orders (compared to 30% in March).

Current average daily shipping levels were slightly lower in April as well. Thirty-two percent of participants reported that current average daily shipping levels are below levels of three months ago (up from 24% in March); 39% reported no change (down from 46% last month); and 29% reported that shipping levels are above levels of three months ago (compared to 30% in March).

Regarding employment issues, the number of metalforming companies with a portion of their workforce on short time or layoff spiked to 25% in April, up from 19% in March and at the highest level since July 2003, when companies reported 28% of their workforce being on short time or layoff.

“Metalforming companies are faced with multiple issues that are negatively impacting their outlook,” said William Gaskin, PMA president. “Not only are major customer markets—including automotive, homebuilding, and construction—all contracting, but the labor strikes at American Axle have caused numerous automotive assembly plants to be idled, resulting in canceled orders for stampings and assemblies. Economic damage from rapidly escalating steel prices also is widespread and negatively impacts the outlook for the next three months.”

For a complete copy of the report, please visit the PMA website at www.pma.org/about/stats/BCreport.