CLEVELAND –The economic outlook for the manufacturing sector is still weak, and the effects of steel tariffs are only making things worse for many companies.

The Precision Metalforming Assn.'s September 2002 Business Conditions Report showed that many manufacturers expect the economic slump to get worse by year's end. Twenty percent of 189 manufacturing companies surveyed predicted a further downward trend, a nine percent increase over the previous month.

Fifty-seven percent predicted no change in economic conditions, while 23 percent said they expect an increase in business activity. That's down four percent from August and 35 percent from the peak of optimism in March. The September numbers are in line with those of September 2001, indicating that predictions of a third-quarter recovery had not been realized.

"We're where we were a year ago, and that's scary," said PMA spokesperson Kelly Wagner.

PMA's members are metalforming companies that make parts used to construct cars, appliances and similar items. Most members are small companies, with between 10 and 300 employees. As heavy consumers of steel, PMA members have been hard hit by the tariffs imposed on foreign steel by the Bush Administration this year.

The tariffs have raised the price of foreign steel, and the situation is driving up the price of domestic steel, as well. Wagner said many steel-consuming manufacturers in this country are losing business to foreign competitors who are able to produce the same parts less expensively. If the trend continues, she said U.S. manufacturers may be forced to move their businesses out of the country.

"This is absolutely crushing the industry," Wagner said.

Terry Piper, former president of the Industrial Supply Manufacturers Assn., echoes those comments, pointing to the impact of tariffs on users of cold rolled and hot rolled steel products made globally. He says the issue is a difficult one to solve, however.

PMA and other groups are lobbying to get the steel tariffs revoked. Wagner said she's hopeful that will happen when the proposed three-year tariffs are reviewed next March.

Piper says his company, Precision Brand Products of Downers Grove, Ill., hasn't been hard hit by rising steel prices, mainly because it uses specialty steel products made only in the United States. But he agrees that the economic climate still is no cause for celebration. Precision Brand Products makes shim steel products used in the tool and die industry and has been affected by a lack of capital spending by customers.

"I don't think anybody has an answer as to how it will come back or when it's going to come back," Piper said of the economy. "You just have to cut back, look at your expenses as much as you can and ride it out until it's over with."