PMA’s June Business Conditions Report
The June report shows that 23% of participants predict that economic activity will improve during the next three months (down from 24% in May), 60% expect that activity will remain unchanged (the same percentage reported last month) and 17% believe that economic activity will decline (up from 16% in May).
Metalforming companies forecast a slight dip in incoming orders during the next three months, with 33% predicting an increase in orders (down from 35% in May), 48% anticipating no change (compared to 50% in May) and 19% expecting a decrease in orders (up from 15% last month).
Current average daily shipping levels also declined slightly in June. Thirty-five percent of participants report that shipping levels are above levels of three months ago (compared to 36% in May), 41% report that levels are the same as three months ago (down from 43% last month) and 24% report a decrease in shipping levels (up from 21% in May).
The percentage of metalforming companies with a portion of their workforce on short time or layoff dropped to 7% in June, down from 9% in May. The June 2015 figure is similar to this time last year, when 8% of companies reported workers on short time or layoff.
“PMA’s June Business Conditions report reflects ongoing concern that we are mired in a slow-growth, strong-dollar period, subject to significant risk of an extended period of underperformance vs. expectations,” said William E. Gaskin, PMA president. “Current and near-term expectations for orders and shipments reported by members are significantly less robust than expectations of four to six months ago, and modestly lower than they were one year ago. Metalforming companies supplying the automotive industry continue to ship at strong levels, but many other markets have softened and are flat or declining modestly, with heavy equipment, agriculture/off-highway, and oilfield business continuing to slow. Political leadership in Washington, D.C., has failed to rally support to address tax reform for corporate and pass-through entities, so U.S. manufacturers are paying higher taxes than their global competitors. And costs of regulatory compliance are set to grow significantly based on pending greenhouse gas and ozone regulations.”