Metalformers Predict Modest Increase in Economic Activity

Companies are optimistic despite a drop in daily shipping levels.

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CLEVELAND โ€” Metalforming companies predict a slight uptick in business conditions in the coming months despite a drop in current average daily shipping levels, according to the August Precision Metalforming Association Business Conditions Report.

Prepared monthly, PMAโ€™s report provides an economic indicator for the next three months of manufacturing, sampling 110 metalforming companies in the U.S. and Canada.

PMAโ€™s August report shows that 18% of metalforming companies expect an increase in general economic activity in the next three months compared to 11% in July, while 53% predict no change in activity compared to 55% in July; 29% forecast a decrease in activity, down from 34% last month.

Metalformers also anticipate a modest improvement in incoming orders, with 26% of survey respondents expecting an increase in orders during the next three months compared to 18% in July, 46% predicting no change โ€” the same percentage reported last month โ€” and 28% forecasting a decrease in orders compared to 36% in July.

Current average daily shipping levels dipped in August for the second straight month; 42% of responding companies reporting a decrease in shipping levels. up from to 28% in July. Only 16% reported an increase in shipping levels โ€” down from 19% in July โ€” and 42% reported no change compared to 53% last month.

โ€œThe modest increase in business activity predicted by metalforming manufacturers in the August report is a positive signal that our members remain resilient despite inflation and other issues that impact the supply chain,โ€ said PMA President David Klotz. โ€œIn my visits to our membersโ€™ facilities, I have heard a growing concern about a possible labor strike by the United Auto Workers. A slowdown caused by a strike would negatively impact our members, who are major suppliers to the auto sector. In addition, we are watching reports that US Steel is looking for a buyer. Such a sale could affect steel supplies and availability, as it already is a tight market due to limited domestic suppliers of flat-rolled steel and a range of trade restrictions on imports.โ€

Lead times rose slightly in August, with 11% of metalforming companies reporting an increase in lead times compared to 7% in July. Nine percent of companies had a portion of their workforce on short time or layoff in August โ€” increasing from 5% in July โ€” while 46% of companies are currently expanding their workforce compared to 42% last month.

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