Economy

PMA Report Indicates Y/Y Increase in Shipping But Future Order Trend Uncertain

July 22, 2014

Metalforming companies are showing some uncertainty about the general economic outlook but more than half reported shipping levels were higher in July 2014 than in July 2013. The forecast for incoming orders in the next three months compared to the previous three is somewhat better–40 percent expecting orders to increase (up from 37 percent) and 40 percent expecting no change (down from 45 percent). The entire press release is reprinted below.

CLEVELAND, OH—July 21, 2014—According to the July 2014 Precision Metalforming Association (PMA) Business Conditions Report, metalforming companies expect a slight decline in business conditions during the next three months. Conducted monthly, the report is an economic indicator for manufacturing, sampling 122 metalforming companies in the United States and Canada.

The July report shows that 28% of participants predict that economic activity will improve during the next three months (down from 31% in June), 58% expect that activity will remain unchanged (up from 54% last month) and 14% believe that economic activity will decline (compared to 15% in June).

Current average daily shipping levels dipped in July. Thirty-one percent of participants report that shipping levels are above levels of three months ago (down from 35% in June), 44% report that levels are the same as three months ago (down from 46% last month) and 25% report a decrease in shipping levels (up from 19% in June).

However, metalforming companies forecast a slight improvement in incoming orders during the next three months, with 40% predicting an increase in orders (compared to 37% in June), 40% expecting no change (compared to 45% in June) and 20% predicting a decrease in orders (up from 18% in June).

The percentage of metalforming companies with a portion of their workforce on short time or layoff increased to 9% in July, up from 8% in June. The July 2014 figure is the same as it was one year ago.

“PMA’s July Business Conditions report reflects continued uncertainty about the general economic outlook,” said William E. Gaskin, PMA president. “In July, PMA members reported a modest improvement in their expectations for new orders and reported consistently low percentages of employees who are on short-time or layoff. While they reported that shipping levels were below those of three months ago, this is a typical situation for July, when the comparison month is April, normally a strong month for shipments vs July. When asked about trends in overall shipment levels in July 2014 vs July 2013, more than half (51%) reported that shipments were up vs 2013, while 26% reported they were the same and 23% reported they were lower.