Business Conditions Report: May 2011

According to the May 2011 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies anticipate a downturn in business conditions during the next three months.  Conducted monthly, the report is an economic indicator for manufacturing, sampling 125 metalforming companies in the United States and Canada.

The May report shows that only 23% of participants forecast an improvement in economic activity during the next three months (down from 40% in April), 55% predict that activity will remain unchanged (compared to 45% last month) and 22% report that activity will decline (up from 15% in April).

Metalforming companies also expect a drop in incoming orders over the next three months, with 27% predicting a decrease in orders (up from 20% in April), 47% anticipate no change (compared to 38% last month) and only 26% predict an increase in orders (down significantly from 42% in April).

Average daily shipping levels also declined in May.  Just 38% of participants report that shipping levels are above levels of three months ago (down from 63% in April), 37% report that shipping levels are the same as three months ago (up from 25% last month), and 25% report a decrease in shipping levels (compared to 12% in April).

The percentage of metalforming companies with a portion of their workforce on short time or layoff increased to 14% in May from 11% in April.  However, the number remains significantly lower than one year ago when 30% of companies reported workers on short time or layoff.

“During the first quarter of 2011, metalforming companies experienced orders 17 percent above Q-1 2010 and shipments 18 percent higher than 2010, on average,” said William E. Gaskin, PMA president.  “The May Business Conditions report clearly indicates there is softening in expectations for the balance of the second quarter and into the summer months, which is at least in part due to the supply-chain disruptions in the automotive and electronic sectors caused by the earthquake in Japan.  Uncertainties in how and when the U.S. Congress will address the debt ceiling, lower than anticipated GDP performance, and the continued slow recovery in homebuilding and construction industries also are contributing to lowered expectations.”

The monthly Business Conditions Report has been conducted by PMA since 1979.  Full report results are available at http://pma.org/public/business_reports/pdf/BCREP.pdf.

PMA is the full-service trade association representing the $113-billion metalforming industry of North America—the industry that creates precision metal products using stamping, fabricating, spinning, slide forming and roll forming technologies, and other value-added processes.  Its nearly 1,000 member companies also include suppliers of equipment, materials and services to the industry.  PMA leads innovative member companies toward superior competitiveness and profitability through advocacy, networking, statistics, the PMA Educational Foundation, FABTECH and METALFORM tradeshows, and MetalForming magazine.

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