February 2023 Volume 5

OPERATIONS & MANAGEMENT

Forging Product Orders Still Strong Despite Slowing Growth By Ian Stringer

Over the last three reporting periods ending in November of 2022, the trend in bookings for forged products has flattened and has become less variable. However, the level of new orders is still strong where the average of the last three months is 48 percent higher than the comparable period in 2021. Continued strength in order growth is a welcome sign in contrast to an over 5 percent month over month decline in shipments relative to October. Movement in shipment levels are generally viewed as an echo of changes to bookings that have occurred in the rearview mirror. While the gap between bookings and shipments has opened a bit since August this gap is now much smaller than it has been over the last two years. The narrowing of the order and shipment gap has put downward pressure on the survey’s dollars per ton metric. However, the impact varies by forged product type. While prices for Impression Die products have been in decline for over a year, those for Rolled Ring and Open Die products have only recently started to fall since peaking late last summer.

Figure 1: Historical Orders and Shipments for All Forged Product Categories (Source: FIA O& S Survey)

In summary, the O& S survey data is a consistent reflection of what is happening in the broader economy. Inflation has peaked, orders have leveled off but are still relatively strong. The forging product data appears to show that the conditions of the last two years are unwinding smoothly.The Federal Reserve policies to target inflation are taking effect by slowing things down but at a comfortable pace. Continuing on this path will likely avoid any shocking downward moves while setting up a healthy economic framework for longer term growth.

Figure 2: Change in dollars / ton metric by product (FIA O& S Survey)

Ian Stringer VP – Data Strategy AMT-The Association for Manufacturing Technology Phone: 703-827-5209 Email: IStringer@amtonline.org

FIA MAGAZINE | FEBRUARY 2023 41