Process manufacturers working with metal and steel see little respite from increasing lead times and labor and supply shortages, according to a recent trade association survey.
More than half of the 105 surveyed metalforming companies predicted little change in economic conditions through the end of the year and a plurality predicted the amount of orders would not change, although a slightly higher percentage anticipate orders will dip.
The Precision Metalforming Association’s latest survey, aside from predictions, also included a snapshot of conditions as of November 1. Two thirds of respondents reported that shipment activity is up from a year ago, slightly fewer than last month, when 70% said shipment was up compared to 2020. Almost 50% of companies said daily shipping levels are up in the same timeframe.
The survey indicates that many metalformers, like other manufacturers, have struggled with longer lead times and hiring all year. In November, 59% of respondents reported longer lead times compared to three months ago. The percentage of companies indicating their lead times are increasing has been over 50% since February this year.
In hiring, a majority of metalformers have indicated they’re looking to expand their workforce every month since December 2020. Just over 70% of respondents said they were looking to increase their ranks in November, 3 points less than the month before.
In a statement accompanying the report, PMA President David Klotz said trade association members are concerned about steel shortages, especially considering recent government actions, in particular the change to steel tariffs and the recent infrastructure bill.
Steel shortages, Klotz said, “will now only be exacerbated with the new infrastructure bill signed into law earlier this month.”
Adding to previous criticism of steel import tariffs, Klotz indicated concern over the tariff-rate quota that replaced tariffs on European steel and aluminum earlier this year. The deal, Klotz warned, “could lead to market manipulation and allow for gaming of the system that could put our members and other small and medium-sized manufacturers at a disadvantage” He said the PMA would continue to advocate for removing trade restrictions.