Being a forger means making a long-term commitment – or rather, many commitments that are correlated, and sometime conflict with each other. There are capital investments, of course, which are comparatively simple to evaluate. There are agreements with suppliers and customers. There are partnerships and alliances. For forgers – or any manufacturer of high-value parts — there is underlying all of this a commitment to quality and integrity in the products being developed and delivered.
It’s because commitments can be so enduring and demanding that individuals working in this way need reliable insights to the actual conditions and the trends underway in their industries. This is the reason the FORGING undertakes to survey forging professionals on an annual basis – to gauge their perceptions and predictions of the current and developing conditions in their business sector.
As 2017 closes and 2018 approaches, any reliable evaluation of U.S. industrial and manufacturing economics will portray a positive outlook. But economics is unstable, and unpredictable; business conditions are prone to sudden reversals, a condition that has been made more volatile, not less, by the wider availability of data and the immediate pace of communication in the current age. More than this, general analysis of economics become less relevant and reliable as the discussion narrows on particular market sectors and industries.
Of course, forging is essential to the overall industrial economy, and it is influenced by the overall conditions. In the most recent edition of the Institute for Supply Management’s Manufacturing Report, economic activity in the manufacturing sector was found to have expanded during October, as the wider U.S. economy expanded for the 101st consecutive month. The ISM New Orders Index for manufactured goods was found to have declined slightly (-1.2%) from September; and a comparable decline (-1.2%) from September was reported in the ISM Production Index.
Such declines seem negligible at the moment — after all, 16 of 18 manufacturing industries making up the ISM index expanded during October, including transportation, machinery, and primary metals. But, the greater problem for an individual seeking to understand the effects of such trends is the accelerating influence of high technology in manufacturing, and the increasing autonomy of individuals making decisions in these operations.
This is the objective we set for the annual FORGING Business Outlook survey: to give forging professionals an informed and reliable reference to the status and direction of the industry they are committed to support.
Get into specifics — Each year, during October, FORGING approaches our readers by email to collect and evaluate their insights about the business conditions the have faced in the recent year – and what their indicators tell them about the coming year. We want to achieve a forecast that is specific to North America’s forging operations. We seek to identify the problems they have faced in the past year, and to learn their opinions about the economy, their markets, and in their businesses.
More than this, we want to learn what plans they’re making for the coming business cycle, and to understand better they’re expectations for the year ahead.
But, first we want to know who the survey respondents are, so that their responses can be coordinated (to a reasonable certainty) to the operations and materials that inform their forging-industry experience and perspective.
The survey respondents are industry executives, managers, and operators active in North America’s forging industry. They forge or form all major types of metal — alloy, carbon, and stainless steels; aluminum, brass and copper, and titanium. Their operations reflect the various plant sizes of the forging industry, from less than 20 workers to 250 or more.
The respondents are engaged in all the processes typically characterized as forging, including open- and closed-die forging, impact extrusion, and ring rolling.
Finally, the respondents are representative of businesses across the spectrum of forging operations, from those with less than $1 million/year in shipments to some doing shipping over $100 million worth of materials annually. And, while the survey is designed to track shipments as a measure of business performance, we also seek information on that will help characterize production activity.
Overall positive — We begin our analysis by reviewing forging-industry business conditions at the end of 2017, and the conclusion of the survey respondents is overwhelmingly positive: nearly two-thirds (62.96%) of all those surveyed reported that the year now ending will deliver improved results (tonnage of products shipped) over the previous year, and another third (33.33%) indicated that the results will be “about the same” as in 2016. Just 3.7% of respondents will finish the year with shipments reduced from last year’s total.
Among those who report improved shipment totals for 2017, 48.6% report that improvement will be in the range of 10-25%, and 28.6% report the improvement will be in the range of 0 to 10%. A further 11.4% will have results that are 26-50% higher than last year, and 5.7% will record improvements range from 51-75%.
Carbon steel (42.6%) and alloy steel (38.9%) forgers are the most likely to report improved shipment totals for 2017. Impression-die forgers (44.4%), open-die forgers (20.4%), and ring rollers (18.5%) are the product categories most likely to correspond to improved current-year shipment totals.
Next, we took the same approach to gauge the respondents’ expectations for shipments in 2018, and their optimism is sustained. Now, nearly two-thirds (62.26%) expect shipment 2018 shipment tonnages to rise over the 2017 totals, and nearly a third (32.1%) expect “about the same” as the current year’s strong results. Just 5.7% are expecting shipments to decline in 2018.
There is more to learn from the FORGING 2018 Business Outlook Report.