Metalformers Expect Softening Business Conditions
Apr 27, 2011
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Metalforming companies anticipate a softening in business conditions during the next three months, according to the April 2011 Precision Metalforming Association Business Conditions Report.
The report is published as an economic indicator for manufacturing, sampling 131 metalforming companies in the United States and Canada.
The April report shows that:
• 40% of participants forecast an improvement in economic activity during the next three months (down from 49% in March)
• 45% predict that activity will remain unchanged (compared to 46% last month)
• 15% report that activity will decline (up from only 5% in March)
Metalforming companies also expect a drop in incoming orders over the next three months:
• 20% predict a decrease in orders (up from 10% in March)
• 38% anticipate no change (the same percentage reported last month)
• 42% predict an increase in orders (down from 52% in March)
However, the report showed the pace of growth in shipments continues to rise, as average daily shipping levels improved in April for the third consecutive month:
• 63% of participants report shipping levels are above levels of three months ago (up from 50% in March)
• 25% report shipping levels are the same as three months ago (down from 39% last month)
• 12% report a decrease in shipping levels (compared to 11% in March)
The percentage of metalforming companies with a portion of their workforce on short time or layoff decreased to 11% in April from 12% in March. The number is at its lowest level since October 2007, when only 8% of companies had workers on short time or layoff, and it is significantly lower than the 42% reported one year ago.
“Business for most of the metalforming industry is quite robust with average orders and shipments for the first two months of 2011 outpacing the same period in 2010 by 16% in orders and 17% in shipments,” said William E. Gaskin, PMA president. “The April business conditions report may reflect concern that there will be a modest softening in the pace of growth as we go deeper into the second quarter. This likely is a result of supply chain uncertainties in the aftermath of the Japanese earthquake, higher fuel prices and higher prices for flat-rolled metals. Business conditions remain very strong for most markets; however, the pace of growth appears to be leveling off as we look toward the summer months.”
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