How are Metal Fabricators keeping up with the recovery?

metal fabricators

If you’ve been in the metal fabrication industry for a while, you probably can’t remember a busier period. It’s also challenging to remember a period when the Corporate leaders of some of the country’s central customized and contractual metal fabricators and metal fabricating machinery were so upbeat. Still, it’s been a wild trip.

From the doldrums of 2009, metal fabricating has enjoyed one of its more good spells in recent memory. The companies are riding high with backlogs that are strong and growing daily. But it wasn’t always that way.

 

 

A few years ago, metal fabricating was in the deep mire of recession. As consumers pulled back on spending, many industrial manufacturers mired in cutbacks and layoffs to save money. Add to this some major automotive makers who were retrenching to protect their hides against low-cost imports from Asia. You have a recipe for tough times for everyone in the fabrication shop who relied on these customers for the business.

When the economy started recovering, it didn’t happen all at once. From the trough of 2009 until last year, many metal fabricating shops saw profitable growth and expansion. But instead of moving forward with a sense of vigor and optimism, they kept looking over their shoulder.

Many projected that as soon as the automotive manufacturers (the big three and foreign transplants alike) got themselves sorted out, they would return to buying everything in sight. So it wasn’t at all unusual for some custom fabricators to keep resources tied up on work for this customer base even when the orders weren’t exactly pouring in. After all, it was easier to be busy than idle.

But once things started taking off last year, those customers were still not going gangbusters, so many of those same metal fabrics decided to spread the risk by diversifying their customer base. If they couldn’t count on the automotive manufacturers to expand, they would have to find other growing customers.

They looked at both commercial and industrial markets for this business, but if anything, the industrial sector turned out to be more promising than initially expected. Meanwhile, some of these fabricators are still hoping that an upturn in automotive orders will appear later in 2013 or early 2014.

Others believe this recovery is sustainable and see no reason it can’t continue indefinitely. After all, there are plenty of indicators suggesting growth has reached critical mass here in the U.S., where consumers are spending again instead of hoarding cash or saving their money for a rainy day. That means metal fabrication companies could be looking at a good run for business in metal fabrication well into the future.

This mirrors what’s happening globally, with many countries now showing growth and others expected to follow suit as soon as this year. It is currently anticipated that global trade will increase by 4 percent next year, the first expansion since 2010.

A full recovery doesn’t mean there won’t be bumps along the way. The automotive manufacturers are still coming out of a deep hole, and they may not look to expand their production capacity until 2015 or 16. This means they will remain a demanding customer base for custom fabricators to crack unless those companies want to wait for them to formally come back online again sometime down the road from now.

 

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