Lead Times Negatively Impacting Outlook for Metalforming Companies

The August 2021 Precision Metalforming Association Business Conditions Report shows 64% of survey respondents reported longer lead times, an increase from July.

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Metalforming companies expect a slight dip in business conditions during the next 3 months, according to the August 2021 Precision Metalforming Association (PMA) Business Conditions Report. Prepared monthly, the report provides an economic indicator for manufacturing, sampling 115 metalforming companies in the United States and Canada.

PMA’s August report shows that 29% of metalforming companies forecast an increase in economic activity in the next 3 months (decreasing from 36% in July), 57% predict no change (compared to 55% last month) and 14% anticipate a decline in activity (increasing from 9% in July).

Sixty-four percent of respondents reported an increase in lead times, slightly up from 63% in July.

“Members are experiencing ongoing challenges particularly in finding the raw materials needed to meet demand, with some members expecting steel lead times to extend into midyear of 2022,” said PMA President David Klotz. “Lead times also are lagging for aluminum, copper, brass and other metals. Add to that the lingering impacts of the pandemic including the difficulty in finding and maintaining skilled workers and our members are facing a complicated landscape. As always, we aren’t waiting for solutions. Rather, PMA members are engaged in a wide range of activities to drive awareness about manufacturing careers and bolster workforce training. Additionally, through our One Voice advocacy team in Washington, D.C., we continue to press the Biden Administration to end the damaging Section 232 steel and aluminum tariffs to help increase materials supply.”

Metalformers expect little change in incoming orders in the next 3 months, with 41% forecasting an increase in orders (compared to 42% in July), 42% predicting no change (decreasing from 45% last month) and 17% anticipating a decrease in orders (compared to 13% in July).

Current average daily shipping levels remained steady in August, with 46% reporting an increase (compared to 45% in July), 42% reporting no change (increasing from 38% last month) and 12% reporting a decrease (compared to 17% in July).

Two percent of responding metalforming companies had a portion of their workforce on short time or layoff in August, compared to 5% in July.