PMA releases October Business Conditions Report.
Press Release Summary:
According to October 2008 Business Conditions Report, metalforming companies expect severe deterioration in business conditions during next 3 months. Report indicates that 67% of participants expect activity will decline, while 26% predict activity will remain unchanged, and only 7% forecast improvement in business conditions. Fifty-four percent of companies anticipate decrease in orders, while 34% expect no change, and 12% forecast increase in orders.
Original Press Release:
Business Conditions Report: October 2008
CLEVELAND, OH - October 13, 2008 - According to the October 2008 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a severe deterioration in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 153 metalforming companies in the United States and Canada.
When asked what the trend in general economic activity will be during the next three months, metalformers anticipate a sharp decline. Sixty-seven percent of participants reported that activity will decline (up drastically from 31% in September), 26% predict activity will remain unchanged (compared to 53% last month) and only seven percent forecast an improvement in business conditions (down from 16% in September). This marks the lowest level of confidence since the January 2001 Business Conditions Report.
Metalforming companies also expect a steep drop in incoming orders during the next three months. Fifty-four percent of companies anticipate a decrease in orders (up from 32% in September), 34% expect no change (down from 41% the previous month) and just 12% forecast an increase in orders (compared to 27% in September).
However, current average daily shipping levels remained steady in October. Seventeen percent of participants report that shipping levels are above levels of three months ago (down from 20% in September), 45% report no change (up from 42% last month) and 38% report that shipping levels are below levels of three months ago (the same percentage reported in September).
The number of metalforming companies with a portion of their workforce on short time or layoff increased to 30% in October - up from 26% in September and at its highest level since November 2002 when 31% of companies reported workers on short time or layoff.
"Responses for PMA's October business conditions survey were submitted during the first 10 days of October, so they fully reflect the credit crisis from the lack of liquidity in financial markets and sharp declines in the global equities markets," said William E. Gaskin, PMA president. "Combined with the current severe production cutbacks in the automotive industry, which impacts some 50 percent of PMA members, the outlook for the fourth quarter is not positive for a large percentage of PMA member companies. However, manufacturing in America is resilient, and there are segments of our membership that are experiencing strong orders and shipments. Many attendees at the recent FABTECH International & AWS Welding Show with METALFORM co-located reported strong shipments and orders and were actively pursuing new capital equipment," observed Gaskin.
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 and other value-added processes. Its nearly 1200 member companies include metal stampers, fabricators, spinners, slide formers and roll formers as well as suppliers of equipment, materials and services to the industry. Members are located in 30 countries, with the majority found in North America in 41 states of the United States as well as Canada and Mexico.
