Optimism Declines for Metalforming Companies as Economic Challenges Remain

The July 2020 PMA Business Conditions Report shows 62% of metalforming companies predict no change or a decline in economic activity in the coming months.

August 3, 2020

Precision Metalforming Association (PMA)

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Metalforming companies were less optimistic about business conditions during the next 3 months than they were in June, according to the July 2020 Precision Metalforming Association (PMA) Business Conditions Report. Prepared monthly, the report provides an economic indicator for manufacturing, sampling 113 metalforming companies in the United States and Canada.

PMA’s July report shows that 62% of metalforming companies predict no change or a decline in economic activity, compared to 47% in June, and only 38% predict an improvement of economic activity compared to 53% in June.

Metalforming companies forecast little change in incoming orders in July, with 52% of participants expecting an increase in orders compared to 3 months ago (a decrease from 57% in June), 28% anticipating no change in orders (compared to 24% in June), and 20% predicting a decrease in orders (compared to 19% last month).

“This month’s PMA Business Conditions Report reflects the uncertainty metalforming companies are facing as they continue to face challenges caused by the COVID-19 pandemic,” says PMA President David Klotz. “It’s clear that this country’s economic recovery will take some time. In the next COVID-19 legislation, PMA urges Congress to incentivize businesses to maintain payroll and invest in their operations, create a new tax credit to support reshoring/onshoring activities, and improve cash flow for manufacturers by making General Business Credits immediately refundable.”

The survey also showed that metalformers experienced a spike in current average daily shipping levels in July, with 35% reporting an increase in shipping levels compared to 3 months ago (increasing from only 9% in June), 15% reporting no change (compared to 10% in June), and 50% reporting a decrease (compared to 81% in June).

Forty-six percent of responding metalforming companies had a portion of their workforce on short time or layoff in July, an increase from 43% in June.