May 2022 Volume 4

OPERATIONS & MANAGEMENT

Forging Industry Market Insights By Ian Stringer

Market StrengthMuted by Supply Chain Headaches The North American Forging Market has risen steadily over the past 16 months as reported by FIA’s Orders & Shipments Survey (O&S) results. Cumulative year over year shipments have increased over 40 percent during the first two months of 2022 as compared to the same period in 2021. Interestingly, bookings for forgings are up nearly 70 percent! In fact, forging orders have been outpacing shipments consistently since Fall of 2020. Unfilled orders are piling up in nearly all industries across the economy and is largely attributed to supply chain constraints.

Data Deep Dive: Drivers The revamped O&S survey has generated a consistent historical time series for 38 months. It’s just enough data to start performing statistical analysis to uncover some additional insights. For this exercise, we focused on the industrial production (IP) data series reported by the U.S. Federal Reserve Bank. Nearly 140 independent IP series covering industries ranging from primary metal manufacturing to medical device manufacturing were evaluated.The IP series were arranged and analyzed in the data set as candidates for both three-month and six-month leading indicators. The results of the analysis revealed only three data series whose variability was found to be statistically significant to the variation in the forging shipments. They are the six-month leading indicator for Construction Steel, and two three-month leading indicators - Commercial & Service Industry Machinery and Durable Manufacturing except Motor Vehicles and Parts. This means that historical changes observed within the data for the mentioned IP data are significantly tied to subsequent movements in forging shipments. Monitoring these discoveries on a regular basis is easy. First, you’ll want to make sure your company is participating in FIA’s O & S survey to receive monthly forging market data. Next, utilize the Federal Reserve’s Economic Database (fred.stlouisfed.org) and search for these three series codes - IPN3311A2BS, IPG3333A9S, IPX005MVS - to monitor the IP series data found in our research. Download the data and evaluate the results in your own spreadsheet. As more data is generated by the O & S survey, it is likely new patterns will emerge. Check back for more analysis, and in the meantime, feel free to reach out with comments or questions.

Included reports: • Monthly Index Overview

FIAOrders & Shipments Survey (byMTInsight) FIA’s Orders & Shipments Survey program was re-launched in 2019 as a web-based high-end survey product. The survey’s scope is confidentially tracking FIA member North American shipments and bookings for forged products inclusive of the Impression Die, Open Die and Rolled Ring processes. About the FIAO&S Survey: FIA partnered with MTInsight, the statistical tracking division of The Association for Manufacturing Technology (AMT) and IMTS Show producer, to build a custom analytics program to serve the forging industry. FIA members enter their monthly orders & shipments data into AMT's custom-built, confidential software system. Categories tracked include OPEN DIE, CLOSED DIE and ROLLED RING forging as well as markets served, and material used. The survey takes 30-minutes or less to complete each month.

• Market Share Report (Dollars) • Product Report (Index Values) • Profile Report (Markets)

As first step members complete their full 2016 sales (in Excel), then gain access to the program for monthly data loading. This is a members-only benefit.

Questions? If you would like more information or a Zoom demonstration to walk through the process of working with the software and loading monthly numbers please contact Jim Warren at jwarren@forging.org.

FIA MAGAZINE | MAY 2022 44