PMPA Business Trends August 2020

 

 

The PMPA Business Trends Sales index inched up to 119,  up 1.7% over July.  While this small increase might be seen as a negative, the greater picture is that this 119 value is a 42% increase in sales over the low point for the year ( April 2020-just four months ago) obviously positive. While the pace of improvement is slowing, we continue to outperform the Fed’s measures for IP and Manufacturing. We believe that this is because our customers still are maintaining very low inventories for components. Low levels of component inventory at our customers,  leads to urgent needs and orders for our parts as demand improves.. All sentiment indicators are strongly positive for the fourth consecutive month. Our outlook remains positive, as our industry sales outpace those of the Fed indicators as the economy continues to recover.

 

 

PMPA BUSINESS TRENDS AUGUST 2020

U.S. Reverses Course on Tariffs on Aluminum Imports from

Canada

 

PMPA is a founding member of the CAMMU Coalition. We are pleased to be able to pass along the following breaking news.

 

The U.S. announced today that it will not impose 10 percent tariffs on aluminum imports from Canada, stating that the U.S. would resume duty-free treatment of aluminum from Canada retroactive to September 1.

 

As you may recall, the U.S. announced in August that it would re-impose Section 232 tariffs on aluminum from Canada, claiming a surge in imports.  CAMMU opposed the tariffs, signing an industry letter and issues press statements (see here and here).

 

The announcement by U.S. Trade Representative Robert Lighthizer was made just before the Canadian Government was expected to announce retaliatory tariffs on U.S. products.

 

Amb. Lighthizer stated that the U.S. would set monthly quotas for imports of Canadian aluminum of 83,000 tons in September and November, and 70,000 tons in October and December, and stated that if shipments “exceed U.S. expectations, the United States will impose the 10 percent tariff retroactively on all shipments made in that month.”  However, a Canadian Government spokesperson said that it has not “agreed to anything” with respect to quotas and that the U.S. plan was “unilateral.”

PMPA Business Trends July 2020

 

With 79 companies responding, the PMPA Business Trends Index for July increased 39.3% to 117 compared to the year’s low in April of 84. It came in up 4.5% above June’s 112 value. This 117 value is down just 2.8 points or 1.4% from the 5-year average for July of 119.8. Our shops’ 4.5% increase in July compared to the Federal Reserve’s reported increase of 3.0%  in industrial production- and compared to the reported 3.4% increase for manufacturing output- shows that our precision machining shops continue to recover faster than the broader manufacturing industry.

 

 

 

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ITR Economic Report – August 2020

Apparently our optimism is congruent with theirs.

As voiced in ITR Economics’ most current economic report…“The current downturn was caused by a natural disaster and not by economic fundamentals, which has important implications for the subsequent recovery trend…

Even more encouraging is that the US Personal Savings Rate spiked to record highs, signaling that consumers were able to set aside part of the stimulus money.

Taken together, the aforementioned evidence is cause for measured optimism…

Full recovery is expected to come faster this cycle relative to the Great Recession, which took about five years..”

Read the full August 2020 report below, as prepared especially for PMPA by ITR Economics.

 

The Institute for Trend Research (ITR) quarterly reports focus on major areas of economic growth and decline in key market segments for the Precision Machined Products Industry. They are provided to PMPA members as part of the association’s overall business intelligence program and are used as a management tool to help PMPA members plan for what lies ahead and which markets they should focus on in a complex manufacturing environment. 

 

 

 

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