Like every business, we are looking at economic predictions for manufacturing for the rest of the year and doing our best to predict what steps we need to take in order to ensure we come through 2020 strong. With GDP growth slowing and unemployment increasing, slowed consumer and business spending is likely to lead to a recession. The Federal Reserve, International Monetary Fund, and other economic organizations have been putting out predictions for the economy that show a contraction for 2020, but largely have us on a recovering trajectory.
Roller Die recently reached out to our regular customers to ask for demand projections. Part of our response to restrictions put in place in the fight against Covid-19 is to order raw material well in advance of when it is needed. This ensures we have the material on hand to roll parts and meet consumer demand. Getting projections for the next few months allows us to continue to do this and provide our customers the certainty that their parts will be delivered on time, as ordered.
The results from this survey showed an interesting cross-section of what manufacturing companies across the U.S. are expecting. While the actual predictions varied by company and industry, some clear trends emerged. Almost all companies were projecting a decrease, often a significant one, in demand in May. This is either because they already have on hand the parts needed from previous months and do not have the demand for their parts or because they are anticipating lower demand in the summer months.
June and July start looking better as companies are forecasting an increase in demand, though not yet back up to 2019 levels. This short-term increase in demand looks promising, but beyond July, predictions seem to split between those companies that anticipate continued recovery (or a second phase of quarantine not being as significant) and those anticipating an economic contraction or second round of quarantining.
At this point, it seems recovery is going to be a long road, possibly going beyond 2020, and the business impacts of the current quarantine are only beginning to show in the economy. Roller Die entered 2020 in a financially strong position and was able to take steps early on to organize our business and workforce in such a way that we anticipate being able to work through a recession and come out with a robust and lean operation.
If you’re looking for a long-term partner for your custom roll formed parts, reach out to the sales team at Roller Die + Forming. Our team would be happy to discuss your needs with you and explain the different steps we’re taking to meet customer needs through this time and ensure our future together.