Metalforming companies expressed optimism that business conditions would improve during the next three months, according to the January 2021 Precision Metalforming Association (PMA) Business Conditions Report. Prepared monthly, the report provides an economic indicator for manufacturing, sampling 120 metalforming companies in the United States and Canada.
PMA’s January report shows that 39% of metalforming companies expect an improvement in economic activity in the next three months (compared to 34% in December), 54% forecast no change (compared to 49% in December), and 7% anticipate a decline in activity (compared to 17% in December).
The survey also revealed that metalformers expect a rise in incoming orders in the next three months, with 50% forecasting an increase in orders (compared to 41% in December), 41% predicting no change (up from 39% last month), and 9% anticipating a decrease in orders (down compared to 20% in December).
“Metalforming manufacturers continue to make the products essential to keep the engine of our economy running during the COVID-19 pandemic,” PMA President David Klotz said. “While members expressed optimism that business conditions would improve, great challenges remain, including the current record high prices for steel and supply-chain problems that are causing low steel inventories as supply tightens.”
To that end, PMA calls on the Biden administration to terminate the Section 232 steel and aluminum tariffs as quickly as possible, he added.
“Steel represents more than half the manufacturing cost for many of our member companies,” Klotz said. “While our members buy a vast majority of their steel from domestic mills, the tariffs have caused the United States to become an island of high steel prices, hurting our member companies’ ability to compete with our foreign competitors, who buy steel at world market prices. Our members compete in the global market every day and we are only asking that the domestic steel industry do the same.”
Current average daily shipping levels improved in January, with only 12% experiencing a decrease (compared to 24% in December), 50% reporting no change (compared to 35% last month), and 38% reporting an increase (compared to 41% in December).
Twelve percent of responding metalforming companies had a portion of their workforce on short time or layoff in January, a decrease from 14% in December. In January 2020, companies reported similar numbers, with 13% of their workforce on short time or layoff.
Full report results are available at https://www.pma.org/public/business_reports/pdf/BCREP.pdf.