Supply Chain and Other Challenges Continue to Plague Metalforming Companies

PMA's October business conditions report shows 25% of metalforming companies are predicting a drop in economic activity in the next 3 months.

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Metalforming companies continue to anticipate that business conditions will be challenging during the next 3 months, according to the October 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 October report shows that, for the third straight month, a growing number of respondents are predicting a drop in economic activity with 25% of metalforming companies forecasting a decline in activity in the next 3 months (increasing from 18% in September), 48% predicting no change (compared to 56% last month) and 27% expecting an increase in activity (compared to 26% in September).

Fifty-eight percent of respondents reported an increase in lead times, down from 61% in September.

“The October PMA Business Conditions Report reinforces what members have been telling me regarding their ability to source needed raw materials and other supply-chain challenges,” said PMA President David Klotz. “In addition, the ongoing chip shortage that is affecting the auto industry is impacting our members who supply that sector. To get more steel and aluminum supply into the market, we are hopeful that a deal is reached this month between the United States and European Union that terminates the damaging Section 232 steel and aluminum tariffs. We do not support any kind of quota system, including a tariff-rate quota, which would simply create more chaos in the market.”

Metalformers also expect a slight dip in incoming orders in the next 3 months, with 32% forecasting an increase in orders (compared to 35% in September), 43% predicting no change (compared to 42% last month) and 25% anticipating a decrease in orders (compared to 23% in September).

The October survey also found that members are reporting a drop in shipping levels. Current average daily shipping levels declined in October, with 27% reporting a decrease (compared to 15% in September), 32% reporting no change (compared to 36% in September) and 41% reporting an increase (decreasing from 49% last month).

Four percent of responding metalforming companies had a portion of their workforce on short time or layoff in October, the same percentage reported in September.