Monthly Business Conditions
Business Conditions Report: February 2012
Monday, February 20, 2012
For more information, please contact Christie Carmigiano
CLEVELAND, OH—February 20, 2012—According to the February 2012 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies predict a spike in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 138 metalforming companies in the United States and Canada.
The February report shows that 51% of participants expect economic activity to improve during the next three months (up from 41% in January), 45% predict that activity will remain unchanged (compared to 54% last month) and only 4% report that activity will decline (down from 5% in January).
Metalforming companies also anticipate a slight improvement in incoming orders during the next three months, with 56% forecasting an increase in orders (up from 51% in January), 33% expecting no change (compared to 40% last month) and 11% predicting a decrease in orders (up from 9% in January).
Average daily shipping levels rose significantly in February. Forty-five percent of participants report that shipping levels are above levels of three months ago (up from 30% in January), 45% report that shipping levels are the same as three months ago (compared to 48% last month), and only 10% report a decrease in shipping levels (compared to 22% in January).
The percentage of metalforming companies with a portion of their workforce on short time or layoff dropped to 7% in February, down from 12% in January. This number has not been at this level since December 2006—the last time only 7% of companies reported workers on short time or layoff.
“Responses to PMA’s February 2012 Business Conditions Report are similar to those of one year ago, in February 2011, when companies in the metalforming industry, on average, grew at a 14% annualized rate during Q-1. The rapid growth in 2011 was cut short by the March 2011 earthquake and tsunami in Japan, and the resulting disruptions of the supply chains for automobiles and electronic products, among others. An important question for the outlook in 2012 is whether external factors, such as occurred in 2011, will again negatively impact growth in manufacturing,” said PMA President William E. Gaskin. “Important issues that may constrain growth include difficulty hiring skilled employees and potentially higher material prices, due to low inventories of flat-rolled metal. The January 2012 Metals Service Center Institute report for inventories of flat-rolled carbon indicated that January inventories were at 2.2 months of supply, down from 2.8 months in December. As the PMA data indicates, expectations for growth are strong at this point, but always subject to external forces.”
The monthly Business Conditions Report has been conducted by PMA since 1979. Full report results are available at 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 1,000 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, and MetalForming magazine.
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