A newly released Business Conditions Report from the Precision Metalforming Association, or PMA, shows metalforming companies expect a significant decline in business conditions during the next three months.
Thirty-two percent expect activity to decline--up substantially from 16% in May--while 57% believe activity will remain unchanged. By comparison, only 11% of participants anticipate economic activity will improve during the next three months--down from 24% in May.
Metalforming companies also forecast a downward trend in incoming orders during the next three months, with 33% predicting a decrease in orders (up from 20% last month) and 52% expecting no change (up from 46% in May. Only 15% of respondents anticipate an increase in orders (compared to 34% in May).
More telling: the percentage of metalforming companies with a portion of their workforce on short time or layoff increased to 14% in June, up from 10% in May. The June figure is the same as it was one year ago.
“PMA member companies have generally experienced growth in 2012 vs 2011, with average orders for the period of January to April up 9% year-over-year and shipments up 11% over the same period," said William E. Gaskin, PMA president. "However, the outlook expressed in the June 2012 Business Conditions Survey reflects the soft business conditions created by economic uncertainty related to the European monetary crisis, confusion in the United States about health care and tax policy (including the massive tax increases threatened at year-end), and the lack of leadership by the President and Congress in addressing our own looming debt crisis. “While politicians increasingly speak about the importance of a strong manufacturing economy, little concrete action has been taken to adopt pro-manufacturing policies or to reduce the cost of regulations."
Gaskin noted that while manufacturing continues to lead the modest growth in the U.S. economy, including consistent growth in jobs, he believes the recovery is definitely in jeopardy as reflected by PMA’s June report. "It is time for the President and Congress to set aside political interests and take concrete actions to support job growth, economic recovery and fiscal prudence,' he said.
The entire June Business Conditions Report is available online.