Page 19 - Metalorming Magazine January/February 2023

2023
MARKET FORECAST: It’s Starting to Feel Like
Spring Again
With dark clouds of pandemic and supply-chain issues dissipating, manufacturing should be in for a little sunshine.
At the dawn of 2023, and for the East and West coasts as well as between Economic Forecast. Revenues are
expected to increase in 15 of 18 man- ufacturing industries with capital expenditures expected to increase by 2.6 percent after a 12-percent increase in 2022. The manufacturing employ- ment base is expected to grow by 3.9 percent in 2023.
Let’s take a closer look into 2023 and beyond for markets near and dear to the metal forming and fabricating communities.
Automotive
No industry has been hit harder by supply-chain woes and computer-chip shortages than automotive manufac- turing. Fortunately, we’re reaching the light at the end of the tunnel, and with- in that light we see more uncertainty as to how the major focus on EVs will play out over the next decade.
LMC Automotive in January 2023 reports U.S. light-vehicle sales of 13.7 million in 2022, the lowest total since 2011, despite a year-over-year increase of 7.2 percent in December 2022. As for the near term, S&P Global Mobility predicts global new light-vehicle sales to reach nearly 83.6 million units in 2023, a 5.6-percent increase year-over- year. This follows projections for full-
first time since 2018, the sun is
shining on greater certainty in markets that matter to metal formers and fabricators. Repercussions from the pandemic may echo for years, but some of its most major effects, namely supply-chain issues and the comput- er-chip shortage, are easing.
The second half of 2022 witnessed a greater availability of chips, and the shortage, indeed, is nearing its end, reportsJ.P.MorganResearch,whilenot- ing that the particular types of chips becoming more available may not be the right type to satisfy all demand. In fact, Volkswagen officials have said that semiconductor supply is unlikely to meet auto-industry demand until 2024. Another stress on the chip market: increased efforts toward electrification in automotive, as electric vehicles (EVs) require more chips that traditional inter- nal combustion engine (ICE) vehicles.
A chip discussion forms part of the greater supply-chain concerns. The newly announced opening of China in regard to Covid lockdowns will ease supply stresses over time, though recent rises in Covid cases there may cause hiccups. And, transoceanic ship- ping rates between Asia and the U.S.
Asia and Northern Europe in January 2023 all have declined from 80 to 90 percent from January 2022, according to the American Journal of Transporta- tion’s January 4, 2023, Freightos Weekly Update.
“The extent and duration of China’s Covid surge will determine how dis- ruptive it will prove to manufacturing and international trade,” the update reads. “In the meantime though, as demand for freight continues to decrease, some additional congestion may not be felt very widely.”
While shipping logjams and prices recede, inflation and raw-material con- cerns continue. Inflation seems to have slowed, and geopolitics—i.e., Russia- Ukraine war, China-Taiwan issues— will bear close watching in 2023. Uncer- tainty in regions depended upon for various alloys and other materials may well affect markets, including EV devel- opment in automotive.
Overall in the United States, expect economic improvement to continue in 2023 across manufacturing and serv- ice industries, according to purchasing and supply-management executives polled in the Institute for Supply Man- agement December 2022 Semiannual
16 MetalForming/January/February 2023
www.metalformingmagazine.com
BY BRAD F. KUVIN, EDITORIAL DIRECTOR, and LOUIS A. KREN, SENIOR EDITOR