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Business Conditions Report: December 2016

Thursday, January 05, 2017

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CLEVELAND, OH—January 5, 2017—According to the December 2016 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a spike in business conditions during the next three months. Prepared monthly, the report is an economic indicator for manufacturing, sampling 115 metalforming companies in the United States and Canada.

The December report shows a major upswing in economic activity, with 43% of participants predicting activity will improve in the next three months (compared to 21% in November), 50% anticipating no change (down from 54% the previous month) and only 7% believing that economic activity will decline (down from 25% in November).

Metalforming companies also forecast a spike in incoming orders during the next three months, with 47% expecting an increase in orders (up from 29% in November), 43% anticipating no change (compared to 48% in November) and 10% predicting a decrease in orders (down from 23% in November).

Current average daily shipping levels remained steady in December. Twenty-seven percent of participants report that shipping levels are above levels of three months ago (compared to 30% in November), 47% report that levels are the same as three months ago (up from 39% the previous month) and 26% report a decrease in shipping levels (down from 31% in November).

The percentage of metalforming companies with a portion of their workforce on short time or layoff decreased to 11% in December, down from 14% in November. The December 2016 figure is better than it was in December 2015, when 14% of companies reported workers on short time or layoff.

“The dramatic one-month spike from 21% to 43% of participants expecting an increase in general economic activity (a 22% shift in one month) is the most significant one-month change since a 36% collapse in expectations for the same measure, in October 2008, at the onset of the Great Recession,” said William E. Gaskin, PMA president. “PMA members also are reflecting the same sentiment as expressed in the manufacturing ISM uptick of 1.5 points in December, with an increase of 18% (to 47%) of members who expect their incoming orders to rise over the next three months. Whether this optimism is a reaction to the election of Mr. Trump, or based on underlying strength of business conditions, is yet to be seen.”

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 $137-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 companies toward superior competitiveness and profitability through advocacy, networking, statistics, the PMA Educational Foundation, FABTECH and METALFORM Mexico tradeshows, and MetalForming, Fabricating Product News and 3D Metal Printing magazines.