Metalforming Companies Remain Cautious as Economic Challenges Continue

Metalforming companies reported a slight improvement in business conditions but continue to anticipate challenges during the next 3 months, according to the August 2020 Precision Metalforming Association (PMA) Business Conditions Report. Prepared monthly, the report provides an economic indicator for manufacturing, sampling 112 metalforming companies in the United States and Canada. 

PMA’s August report shows that 38% of metalforming companies predict an improvement in economic activity during the next three months (the same percentage reported in July), 45% expect no change (compared to 39% last month), and 17% anticipate a decline in activity (a decrease from 23% in July).  

Metalforming companies also forecast a slight uptick in incoming orders, with 55% of participants expecting an increase in orders compared to three months ago (an increase from 52% in July), 33% anticipating no change in orders (compared to 28% in July), and only 12% predicting a decrease in orders (compared to 20% last month).

“While there are glimpses of improvement, the August PMA Business Conditions Report shows the continued uncertainty that metalforming companies are experiencing due to the COVID-19 pandemic,” says PMA President David Klotz. “Our members are showing amazing resiliency but it’s clear that it will be some time before the economy fully recovers, and we expect there to be ups and downs the remainder of the year.”

Klotz continues, “PMA urges Congress and the White House to come together on an economic recovery package that reflects our members’ policy priorities: create long-term low-interest loans to purchase raw materials and equipment, business liability protection as they follow government guidelines, and an immediate claim of General Business Credits and expanding the Employee Retention Credit to Small Business Administration’s Paycheck Protection Program (PPP) recipients.”

The survey also showed that metalformers experienced an upswing in current average daily shipping levels in August, with 52% reporting an increase in shipping levels compared to three months ago (up from 35% in July), 21% reporting no change (compared to 15% in July), and 27% reporting a decrease (down from 50% in July).

Thirty-seven percent of responding metalforming companies had a portion of their workforce on short time or layoff in August, a decrease from 46% in July.