State of the Metalforming Industry – What Does the Data Say
This is article is part of a series of monthly articles produced by Harbour Results for PMA’s MetalForming Business Edge e-newsletter. Click here to view the full collection of articles.
PMA offers metal formers who are members access to manufacturing industry data, metal forming-specific data and benchmarking data. Data is one of the best tools in a manufacturer's toolbox to maintain or improve competitiveness. In Q2 2023 98 companies representing 118 facilities participated in the PMA Metalforming Insights. Our Harbour IQ analysts are currently finalizing the detailed report that participants will receive but thought we would share some preliminary and high-level results.
Although the respondents continue to site higher cost of business as the number one concern, for the first time in recent years the economy and its impact on metal formers enter top concerns with threat of a U.S. recession and continued inflation ranking second and fourth respectively. Despite the numerous challenges manufacturers face, most shops indicated that in 2022 they business performed better than expected. Those companies focused on sports and recreation, lawn and garden and consumer goods industries performed worse than expected.
Most metal formers are forecasting 2023 to be worse than 2022 with 75% of respondents indicating revenue will decline or be flat and 87% stating profits will decline or be flat. This is on par with other manufacturing processes. In fact, according to the Harbour IQ Manufacturing index, which provides a look at the overall expansion or contraction of the industry, overall manufacturing received a score of 59 and metal forming 58.
Additionally, study participants reported Q2 2023 capacity to be 58% and expect it to tick up slightly to 59% in Q4 2023. This is slightly below what die casters are forecasting and above what plastics processors are forecasting.
It does appear that manufacturing is softening, and due to growing cost and price pressures some companies have been forced to close or sell. But we remain steadfast that the slowing economy – in the end – will not have a significant impact on the industry. That said, we are seeing a “tale of two cities” where best-in-class companies continue to excel while others struggle. It is important that companies take steps to improve flexibility and de-risk their business to be prepared for a boom or bust in demand.
Why Participate in PMA’s MetalForming Insight Benchmarking
This is the first year PMA transitioned to one annual benchmarking study that covers all aspects of the business, including finance, operations, sales and forecasting and human resources. Those who participate in the study receive a comprehensive report and access to a customized dashboard. This level of data gives business leaders an overall picture of what’s going on outside of their business, with competitors and the overall industry as well as benchmark your performance against others. It gives companies insight to identify and address issues to improve your business’s efficiency and competitiveness.
We encourage all PMA members to participate in the study and gain access to the powerful reports. And, if you are not a PMA member, it is not too late the join the organization to take advantage of its many benefits.
Let us know if you would like to learn more about MetalForming Insights and how to leverage benchmarking to help your business.