Economy

Mild Optimism by Metalformers in December

December 20, 2014

Metalforming companies are expecting a slight improvement in business conditions over the next three months, according to the December survey by the Precision Metalforming Association. PMA says low fuel prices may help offset manufacturing costs. Low gas prices may also push surging auto sales into 2015. The December report follows:

CLEVELAND, OH—December 18, 2014—According to the December 2014 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a slight improvement in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 119 metalforming companies in the United States and Canada.

The December report shows that 29% of participants predict that economic activity will improve during the next three months (up from 26% in November), 58% expect that activity will remain unchanged (compared to 52% last month) and only 13% believe that economic activity will decline (down from 22% in November).

Metalforming companies anticipate a spike in incoming orders during the next three months, with 37% predicting an increase in orders (up from 29% in November), 51% anticipating no change (compared to 47% in November) and 12% expecting a decrease in orders (down from 24% in November).

However, current average daily shipping levels dropped in December. Thirty-three percent of participants report that shipping levels are below levels of three months ago (up from 24% in November), 38% report that levels are the same as three months ago (compared to 34% last month) and 29% report an increase in shipping levels (compared to 42% in November).

The percentage of metalforming companies with a portion of their workforce on short time or layoff increased to 12% in December, up from 8% in November. The December 2014 figure marks an increase from this time last year, when only 9% of companies reported workers on short time or layoff.

“As 2014 draws to a close, the metalforming industry looks forward to a modest increase in activity in the first quarter of 2015,” said William E. Gaskin, PMA president. “The positives of lower oil prices on consumers may help the 2014 surge in sales of new light trucks and cars continue longer than anticipated into 2015. Lower energy costs also help manufacturers control their manufacturing costs, which should be a positive. However, the mid-December swoon in the stock market may undermine confidence in the strength of our economic recovery. The metalforming industry will benefit from the recent approval of important tax benefits for investment in new equipment during 2014, but it was extraordinarily disappointing that members of Congress and the President did not work together to provide manufacturers the certainty of knowing that these same important incentives for growth will be available in 2015.”

The monthly Business Conditions Report has been conducted by PMA since 1979. Full report results are available at http://www.pma.org/public/business_reports/pdf/BCREP.pdf