August 2020 Volume 2

COVER STORIES

Road to Economic Recovery How long will it take and what’s the impact on the forging industry and its end markets? By ITR Economics

Many tough lessons were learned in the first half of 2020, and vulnerabilities were laid bare. Navigating the global COVID-19 shutdowns required ingenuity, leadership, and focus. Although some industries prospered, the majority – including the forging industry – were negatively impacted. As we move into the second half of the year, the US is at least partially open for business, and monthly data has ticked up for the industrial and retail sectors. The economy is not out of the woods yet, but there are some encouraging signs. This leaves our clients wondering what the road to recovery will look like. Further, with fall planning season fast approaching, what decisions can firms make now to maximize their prospects and profits for 2021 and beyond?

In this article, we will walk you through these topics and outline our forecasts for the industrial sector and key forging end markets. We will aim to be fully transparent regarding the assumptions, reasoning, and risks related to our forecasts, so you can make the best and most fully informed decisions for your business. Where AreWe Now?The Latest Data Generally speaking, the macroeconomic data showed acute contraction in April, some modest improvement in May, and a stronger June.

Readers of our April article may recall that the forging industry has a particularly tight relationship to movements in US Industrial Production.Thus, it is not surprising that the above table is generally consistent with an FIAmember we interviewed, who described April

and May as the “bottom,” with June and July a bit better. The FIA data (available through May) supports the FIA member's statement regarding severe contraction in April and May:

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