Metals Trade Group Predicts Slower Conditions Amid Economic Uncertainty

Metals Industry Faces Slower Conditions Amid Economic Concerns

A recent survey conducted by the Precision Metalforming Association (PMA) indicates that economic expectations in the metals industry have decreased for three consecutive months. The Cleveland-based PMA surveyed 99 companies across the United States and Canada in April 2024, revealing a concerning decline in forecasts for economic growth.

Declining Economic Activity Expectations

Only 16% of survey respondents expect an increase in economic activity over the next three months. This marks a significant drop from the 23% who anticipated growth in March. While 47% predict no change in activity, 37% expect a decline, a notable increase from 23% in March. This shift points to the growing concerns within the metals industry about potential economic slowdown.

Modest Shipping Rebound Offers a Glimmer of Hope

Despite the gloomy outlook, PMA members reported a slight rebound in average daily shipping levels. 44% of respondents reported an increase in shipping levels in April, compared to 35% in March. This modest recovery offers some optimism, especially for those in metal stamping and other metal forming sectors.

Trade Policy and Reshoring Concerns Impact Industry Outlook

While some respondents express concern over a potential drop in incoming orders, there is a mixed outlook on future demand. Approximately 26% expect a decline in orders in the coming months, while 27% anticipate an increase. PMA President David Klotz attributes part of the uncertainty to unpredictable U.S. trade policy and the widening gap between U.S. steel prices and global prices. This discrepancy has significant implications for the metals industry’s cost structure, particularly for manufacturers reliant on steel inputs.

Reshoring initiatives have provided some hope for the industry, as more customers are interested in moving production back to the U.S. due to tariffs. However, Klotz also highlights the concerns surrounding federal program cuts. The proposed elimination of the Manufacturing Extension Partnership (MEP) could undermine efforts to support small and medium-sized manufacturers in the U.S. “If we want to strengthen domestic manufacturing and compete globally, we need continued support for programs that help small and medium-sized manufacturers modernize and innovate,” Klotz added.

Navigating Economic Uncertainty in the Metals Industry

As the metals industry faces growing concerns about economic conditions, the outlook remains uncertain. While there are some positive signs, such as increased shipping levels and reshoring interest, challenges related to trade policies and federal program cuts could undermine the sector’s growth. Manufacturers are looking to adapt, but the need for continued support and economic stability remains crucial for long-term success.