Economy
Challenges in Q3 for Metalforming Companies
Written by Sandy Williams
June 21, 2021
The next three months will be challenging, said metalforming companies in the June 2021 Precision Metalforming Business Conditions Report. Only 36% of companies expect an improvement in economic activity during the period, down from 41% in May, while 12% anticipate a decline in activity, up from 10% in the previous month.
The percentage of respondents reporting an increase in lead times dropped to 66% in June from 71% in May. The June survey marked the first decline reported for lead times in eight months.
Average daily shipping levels decreased in June and metalformers are expecting a dip in new orders during the next three months.
“Obtaining raw materials and finding workers are the biggest challenges reported by PMA members,” said PMA President David Klotz. “Members are reporting lead times extending into 2022 for steel, with similar challenges for aluminum, copper, brass and other metals. The semiconductor shortage that has idled some auto plants also is negatively impacting orders.”
Companies with a portion of their workforce on short time or layoff in June was unchanged from May at 4%.
“PMA, through its One Voice advocacy team in Washington, D.C., continues to engage policymakers and members of Congress to find ways to increase supply, including ending the damaging and unnecessary Section 232 steel and aluminum tariffs, and to help the industry recruit workers by promoting awareness and training,” added Klotz.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”
Steel exports recovered in May but still historically low
US steel exports rose 10% from April to May but remained low compared to recent years. This came just one month after exports fell to the lowest level recorded in nearly five years.
AISI: Raw steel production ticks up near recent high
The volume of raw steel produced by US mills inched higher last week, according to the American Iron and Steel Institute (AISI). After steadily increasing in April and May, domestic mill output stabilized in early June and has remained historically strong since.