Metalformers Optimistic about U.S. Economy Jul 19, 2004

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Metalforming companies continue to express greater optimism about the economy, according to the July 2004 Precision Metalforming Association (PMA) Business Conditions Report. Conducted monthly, the report is an economic indicator for manufacturing that samples 187 metalforming companies in the U.S. and Canada.

"Metalforming companies expect that general economic activity will continue to increase modestly over the next three months," reported William E. Gaskin, PMA president. Forty-two percent of respondents expect business conditions to improve (up 6 percent from last month), 49 percent said that activity would remain the same, while only 9 percent thought it would decrease (down from 15 percent in June).

Metalformers are also expecting incoming orders to increase over the next 3 months, with a sharp resurgence of optimism compared to June. Forty-eight percent of participants anticipated that orders would increase (up from 40 percent in June), 40 percent predicted no change, and just 12 percent said orders would decline over the next 3 months (compared to 20 percent in June).

While participants expect general business conditions to improve and incoming orders to increase over the next 3 months, they reported that their daily shipping levels were lower in July compared to three months ago. Mr. Gaskin noted, however, "It is likely that this July slowdown is a fairly typical seasonal pattern, where shipments drop modestly from June, perhaps due to automotive assembly plant vacation and maintenance schedules." Just 48 percent stated that July shipping levels were above the levels of three months ago, compared to 53 percent in June and 66 percent in May.

The report also showed that 16 percent of responding companies are currently experiencing their workforce on short time or layoff. While this number increased from 13 percent in June, this is a significant improvement when compared to July of 2003, when 28 percent reported their plant workforce was on short time or layoff.

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