Slower Economic Activity Predicted by Metal forming Manufacturers

According to the June 2024 Precision Metal forming Association (PMA) Business Conditions Report, the forecast for economic activity over the next three months among metal forming manufacturers continues to decline. The PMA's monthly report serves as an economic indicator, surveying 91 metal-forming companies across the United States and Canada to gauge future manufacturing conditions.

"The June survey confirms that PMA members are experiencing a slowdown in economic activity, mirroring other recent manufacturing sector reports that indicate a contraction," said David Klotz, PMA president. "Our members are feeling a general uncertainty regarding industrial demand, the upcoming election outcome, potential tariff increases in 2025, and possible tax hikes in 2026. This uncertain environment makes it challenging for downstream companies to plan and address their customers' concerns about similar market uncertainties and the future control of Washington post-November election."

The June report reveals that only 14% of surveyed manufacturers expect an increase in economic activity over the next three months, down from 19% in May. Conversely, 30% anticipate a decrease, up from 26% in May, while 56% foresee no change, a slight increase from 55% last month.

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Additionally, metal formers are predicting a decline in incoming orders. Only 24% of respondents expect an increase in orders over the next three months, down from 32% in May. Meanwhile, 50% predict no change (up from 49% last month), and 26% anticipate a decrease (up from 19% in May).

In terms of daily shipping levels, 46% reported no change in June (down from 49% in April), 25% reported an increase (up from 21% last month), and 29% reported a decrease (down from 30% last month).

Lead times increased in June, with 10% of metal-forming companies reporting longer lead times compared to 7% in May. Additionally, 8% of companies had a portion of their workforce on short time or off in June, down from 12% in May. Meanwhile, 40% reported expanding their workforce, up from 35% in May.

Summary Table: Economic Activity Forecast (June 2024)

Conclusion

The latest PMA Business Conditions Report highlights a growing sense of uncertainty and caution among metal-forming manufacturers navigating an increasingly challenging economic landscape. With fewer companies anticipating an uptick in activity and orders, the industry is bracing for a potential slowdown. The fluctuating lead times, shipping levels, and workforce changes underscore the volatile environment.

As businesses continue to face uncertainties around industrial demand, election outcomes, and future tariff and tax policies, it becomes crucial for companies to remain agile and proactive in their planning. Staying informed and adapting to these dynamic conditions will be vital in managing the upcoming months effectively. For ongoing updates and insights, follow our blog and stay connected with industry events and reports.