PMA calls for swift action to resolve federal fiscal crisis

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The December Business Conditions Report from the Precision Metalforming Association indicates modest optimism among members. Looming on the horizon, and on the minds of the 126 members of the PMA’s report sample, is the “fiscal cliff” crisis in Washington, and association leaders called for swift action to resolve that issue.

The December PMA report found 22% of participants believe that economic activity will improve during the next three months, up from 19% in November. Another 49% predict that activity will remain unchanged, also up from the previous month’s level, while just 29% expect activity will decline.

Part of that optimism is built around an increase in orders in November. Over the next three months, one-third of metalforming anticipated an increase in orders, up from 28% in November.

The one darker cloud in the statistics is the percentage of metalforming companies with a portion of their workforce on short time or layoff. That figure stayed at 17% in December, the same level as November, and five percentage points higher than the 2011 report.

PMA president William Gaskin balanced the good news against the concerns of the association members. “There is significant uncertainty in the manufacturing sector being caused by the looming fiscal cliff in areas such as personal/corporate tax rates, availability of the R&D Investment Tax Credit and depreciation rules for investment in new equipment,” said Gaskint. “The average PMA member company has experienced 6% growth in orders and shipments for the first 11 months of 2012 vs. 2011, so most have had an okay year and should be poised to continue investing.

“However, uncertainty about how the President and Congress will resolve the tax and spending issues that stand in the way of continued economic recovery has them far more pessimistic than they were at this time last year. PMA calls on President Obama and the leadership of the U.S. House of Representatives and U.S. Senate to quickly resolve these political issues so the manufacturing sector can create new jobs and provide economic certainty for its employees.”