PMA releases Business Conditions Report for October 2009.
Press Release Summary:
According to PMA Business Conditions Report, metalforming companies expect leveling in business conditions and incoming orders during final quarter of 2009. It shows 54% of companies expect activity will remain unchanged over next 3 months and 40% expect no change in incoming orders, while 54% report that shipping levels are higher than 3 months ago. Companies with portion of workforce on short time or layoff decreased to 60%, possibly reflecting permanent downsizing of workforces.
Original Press Release:
Business Conditions Report: October 2009
CLEVELAND, OH - October 16, 2009 - According to the October 2009 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a leveling in business conditions and incoming orders during the final quarter of 2009. Conducted monthly, the report is an economic indicator for manufacturing, sampling 149 metalforming companies in the United States and Canada.
The October report shows that metalformers are less optimistic about general economic activity during the next three months. Just 30% of participants anticipate an improvement in overall economic activity (down from 47% in September), 54% expect that activity will remain unchanged (compared to 42% last month) and 16% report that activity will decline (compared to 11% in September).
The percent of metalforming companies forecasting a decrease in incoming orders during the next three months rose from 14% in September to 22% in October. Increased orders were forecast by 38% (down from 51% in September), and 40% expect no change (up from 35% the previous month).
However, current average daily shipping levels remained steady in October. Fifty-four percent of participants report that shipping levels are above levels of three months ago (compared to 53% in September), 31% report no change (up from 30% in September) and 15% report that shipping levels are below levels of three months ago (down from 17% reported last month).
The number of metalforming companies with a portion of their workforce on short time or layoff decreased to 60% in October, down from 68% in September. While this is the lowest level since December 2008 when 54% of companies had workers on short time or layoff, it may also reflect that some companies have permanently downsized their workforce, eliminating plans to recall workers previously considered temporarily laid off.
"While metalforming companies have generally experienced a significant rebound in orders and shipments over the past few months, there is real concern about whether the rebound has staying power," says William E. Gaskin, PMA president. "Many believe that the current uptick is primarily inventory restocking and that without a more robust recovery of consumer spending and capital investment, their increased orders will disappear later this year and during the first quarter of 2010. However, 78% of PMA members expect new orders through year-end to be the same as, or higher than, for the past three months. The outlook is much more robust than it was one year ago, when the majority were seeing new orders drop precipitously," Gaskin says.
The monthly Business Conditions Report has been conducted by PMA since 1979. Full report results are available at pma.org/about/stats/BCreport. PMA is the full-service trade association representing the $91-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 1,100 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, METALFORM tradeshows and MetalForming magazine.
