The latets report from the Precision Metalforming Association (PMA) indicates that members predict a spike in business conditions during the next three months. This is consistent with the survey results published in previous reports.
Following are some specifics from the February PMA Business Conditions Report:
Fifty-one percent of participants expect economic activity to improve during the next three months, which represents an increase from 41% in January. At the same time, only 4% of respondents expect to see a decline-down from 5% in January.
With respect to new orders,more than half--or 56%--of metalformers surveyed forecast an increase (up from 51% in January. Meanwhile, 11% predict a decrease in orders. During the month of February, average daily shipping levels rose significantly: 45% of participants said shipping levels are above those seen three months ago--up from 30% in January. Meanwhile, only 10% of respondents report seeing a decrease in shipping levels (compared to 22% in January).
William Gaskin, PMA president, said the responses to PMA’s February 2012 Business Conditions Report are similar to those in February 2011, when companies in the metalforming industry, on average, grew at a 14% annualized rate during Q-1. Back then, he noted, the rapid growth in 2011 was cut short by the March 2011 earthquake and tsunami in Japan, and the resulting disruptions of the supply chains for automobiles and electronic products, among others. An important question for the outlook in 2012 is whether external factors, such as occurred in 2011, will again negatively impact growth in manufacturing.
“Important issues that may constrain growth include difficulty hiring skilled employees and potentially higher material prices, due to low inventories of flat-rolled metal," Gaskin explained. "The January 2012 Metals Service Center Institute report for inventories of flat-rolled carbon indicated that January inventories were at 2.2 months of supply, down from 2.8 months in December. As the PMA data indicates, expectations for growth are strong at this point, but always subject to external forces.”
The complete February 2012 Business Conditions Report is available online.