Metalforming companies are more optimistic for improved business conditions during the next 3 months, but continue to report longer lead times for steel and other materials, according to the March 2021 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 March report shows that 50% of metalforming companies forecast an improvement in economic activity in the next 3 months (compared to 37% in February), 41% predict no change (compared to 56% in February) and 9% anticipate a decline in activity (compared to 7% in February).
However, the March report indicates that lead times continue to increase. When asked about lead times compared to the previous 3 months, 60% of respondents say that they have increased, up from 54% in February. Respondents have continued to report lead-time increases each month since September 2020, when only 16% reported increased lead times.
“Metalforming manufacturers are seeing an uptick in business, but their ability to meet the demands of their customers is threatened by severe and growing supply problems,” said PMA President David Klotz. “Lead times for steel, aluminum, copper, brass and other metals are steadily increasing, and prices continue to rise. PMA continues to call on the Biden Administration to terminate the Section 232 steel and aluminum tariffs, which no longer are needed and are one of the main causes for chaos in the market.”
The survey reveals an expectation for increased incoming orders in the next 3 months, with 54% forecasting an increase in orders (up from 48% in February), 33% predicting no change (down from 41% last month) and 13% anticipating a decrease in orders (compared to 11% in February).
Current average daily shipping levels rose in March, with 63% reporting an increase (up from 52% in February), 20% reporting no change (compared to 31% last month) and 17% reporting a decrease (the same percentage reported in February).
Five percent of responding metalforming companies had a portion of their workforce on short time or layoff in March, a slight increase from 4% in February. At this time last year, 14% of participants reported workers on short time or layoff.