April 2020 Business Conditions Report: Unprecedented Decline in Outlook For Economic Activity

The April 2020 Precision Metalforming Association (PMA) Business Conditions Report recorded its sharpest decline in predictions across almost every category since PMA began publishing the report in 1979. The monthly report provides an economic indicator for manufacturing, sampling 101 metalforming companies in the United States and Canada.

The April 2020 report showed staggering increases in the numbers of manufacturers who predict challenging times for the industry. The report showed that 87% of participants now predict a decline in economic activity during the next three months (up from 31% in March). Metalformers also expect a substantial drop in incoming orders, with 82% predicting a decrease in orders (compared to 25% last month). Current average daily shipping levels also declined in March, with 65% reporting lower shipping levels than three months ago (increasing from 14% in March).

The percentage of metalforming companies with a portion of their workforce on short time or layoff in April spiked to 40%, up from 14% in March. This is the highest percentage reported since the 2008-2009 economic downturn. From November 2008 through December 2009, metalforming companies reported a minimum of 42% of workers on short time or layoff, with the peak of 85% occurring in April 2009.

“PMA’s April Business Conditions report underscores that, like most sectors of the economy, manufacturing is facing unprecedented challenges caused by the COVID-19 pandemic,” said PMA President David Klotz. “Our members are rising to the challenge to help the country fight the virus.  Many PMA member companies are continuing operations in order to supply parts for a wide range of medical equipment needed during the pandemic. PMA members have even stepped in to convert their manufacturing processes to produce personal protective equipment for the health care industry.  Our members are following the health and safety guidelines set by the Centers for Disease Control (CDC) to ensure the health and safety of their employees.”

“PMA is working on a daily basis to support our members,” continued Klotz. “We are providing health, safety and business guidance via a dedicated page on the PMA website. PMA’s advocacy team in Washington, D.C., is working to ensure that the voice of small and medium-sized manufacturers is being heard. While many of our priorities were reflected in the economic stimulus legislation recently passed by Congress, PMA is calling on Congress to replenish the Small Business Administration’s Paycheck Protection Program (PPP) loan program as soon as possible before available funds are depleted. This is a critical program for many PMA members.”

Full report results are available at https://www.pma.org/public/business_reports/pdf/BCREP.pdf.