Business Conditions Report: December 2012
CLEVELAND, OH—According to the December 2012 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a slight improvement in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 126 metalforming companies in the United States and Canada.
The December report shows that 22% of participants believe that economic activity will improve during the next three months (up from 19% in November), 49% predict that activity will remain unchanged (up from 45% last month) and 29% expect activity to decline (down from 36% in November).
Metalforming companies also forecast an uptick in incoming orders during the next three months, with 33% anticipating an increase in orders (up from 28% in November), 39% expecting no change (the same percentage reported last month) and 28% predicting a decrease in orders (down from 33% in November).
Average daily shipping levels continued to remain fairly steady in December. Twenty-seven percent of participants report that shipping levels are above levels of three months ago (up from 25% in November), 30% report that shipping levels are the same as three months ago (compared to 37% in November), and 43% report a decrease in shipping levels (up from 38% in November).
The percentage of metalforming companies with a portion of their workforce on short time or layoff remained at 17% in December, the same number reported in November. The December figure is higher than it was one year ago when metalformers reported only 12% of workers on short time or layoff.
“There is significant uncertainty in the manufacturing sector being caused by the looming fiscal cliff in areas such as personal/corporate tax rates, availability of the R&D Investment Tax Credit and depreciation rules for investment in new equipment,” said William E. Gaskin, PMA president. “The average PMA member company has experienced 6% growth in orders and shipments for the first 11 months of 2012 vs. 2011, so most have had an okay year and should be poised to continue investing. However, uncertainty about how the President and Congress will resolve the tax and spending issues that stand in the way of continued economic recovery has them far more pessimistic than they were at this time last year. In December 2011, only 12 percent of our members expected incoming orders to be down during the first three months of 2012; however today, 28 percent feel that the first three months of 2013 will be down. Similarly, last December, 40 percent expected orders to be rising during the first quarter of 2012, but today, only 33 percent believe orders will rise during the first quarter of 2013. PMA calls on President Obama and the leadership of the U.S. House of Representatives and U.S. Senate to quickly resolve these political issues so the manufacturing sector can create new jobs and provide economic certainty for its employees.”
The monthly Business Conditions Report has been conducted by PMA since 1979. Full report results are available at http://www.pma.org/public/business_reports/pdf/BCREP.pdf. PMA is the full-service trade association representing the $113-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 900 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, FABTECH and METALFORM tradeshows, MetalForming magazine and Fabricating Product News.