As August 2023 unfolds, PMA's latest installment of the Business Conditions Report takes center stage, shedding light on the outlook of metalforming companies in the United States and Canada.
Against the backdrop of fluctuating economic indicators and the persistent buzz of supply chain disruptions, the August 2023 report paints a nuanced picture of the metalforming sector's expectations. While the past months have seen their share of uncertainties, this report's findings suggest a measured optimism among metalforming companies. By analyzing key metrics such as economic activity predictions, incoming orders, shipping levels, and workforce dynamics, the report provides a comprehensive view of the industry's trajectory for the next three months.
Despite a decline in current average daily shipping levels, metalforming firms are cautiously optimistic about a slight improvement in business conditions over the next few months. This projection comes from the August 2023 Business Conditions Report by the Precision Metalforming Association (PMA). This monthly report offers insights into the economic trajectory of manufacturing for the upcoming three months, drawing data from a survey of 110 metalforming companies operating in the United States and Canada.
The August report from PMA reveals that 18% of the surveyed metalforming companies anticipate a rise in general economic activity in the coming three months, indicating an increase from the 11% recorded in July. Meanwhile, 53% expect no significant change in activity, a slight decrease from July's 55%. Additionally, 29% of the respondents forecast a decline in activity, showing improvement compared to the 34% reported in the previous month.
Metalformers also anticipate a modest enhancement in incoming orders. The report indicates that 26% of the surveyed participants foresee an uptick in orders during the next three months, marking a rise from the 18% reported in July. Simultaneously, 46% predict a status quo in order volume, aligning with the figures from the previous month. Moreover, 28% expect a decrease in orders, showing a decrease from July's 36%.
The report underscores a decline in the average daily shipping levels for the second consecutive month in August. Among the responding companies, 42% reported a reduction in shipping levels, compared to the 28% recorded in July. Conversely, only 16% noted an increase in shipping levels, down from July's 19%, while 42% reported no change, a decrease from the 53% reported last month.
PMA President David Klotz commented, "The modest upswing in business activity projected by metalforming manufacturers in the August report signifies a positive indication of our members' resilience despite challenges like inflation and supply chain disruptions." He further acknowledged concerns within the industry about a potential labor strike by the United Auto Workers and the possible impact on metalforming suppliers. Additionally, he highlighted the potential effects of a sale of US Steel on steel supplies and availability due to existing constraints within the market.
The report also highlighted a slight increase in lead times for August. Eleven percent of metalforming companies reported longer lead times, up from the 7% reported in July. While 9% of companies experienced partial workforce reductions or layoffs in August, a slight increase from July's 5%, 46% of firms are currently in the process of expanding their workforce, a modest rise from the 42% reported last month.
You can find full report results here: pma.org/public/business_reports/pdf/BCREP.pdf