Metalworking firms are cautious

Metalformers group anticipates continued soft orders

by Tom Stundza -- Purchasing, 8/20/2008 1:15:00 PM

As summer vacations end, North American metalworking companies usually have higher expectations for improved orders, shipments and general economic conditions--but not this year. Metals processing companies anticipate weak business to continue after Labor Day, according to the August business conditions report by the Precision Metalforming Association (PMA) in Cleveland.

The summertime seasonal demand weakness for steel, particularly for carbon flat-rolled mill products bought by metalformers, has been more intense than had been expected by most analysts. And that has caused domestic transaction prices for sheet to soften slightly. In fact, it appears that the global steel-price spike has peaked and there is the possibility of a declining price environment in the second half.

Still, “metalforming companies anticipate unusually soft incoming orders for the next three months and hold lower than normal expectations for general economic conditions,” according to William E. Gaskin, president of the trade group in a statement. He says that PMA member expectations “this year appear to be softer than normal, with reduced volumes for suppliers to the automotive, appliance and home-building industries.” 

PMA-member companies are expecting little change in incoming orders for the next three months with 29% anticipating a decrease in orders and 42% anticipating no change.

The survey of the 1200 metalworking firms matches the pessimism from the 1,045 buyers who answered Purchasing’s monthly survey and said that buying plans through October would be flat nationally but reduced in the Northeast, Midwest, South and West regions.

See also: Buyers aren’t planning for a near-term industrial lift

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