Forging and Stamping

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,000 forging and stamping companies in the US produce a variety of metal-based products that are typically used as parts or components in assembled items. Major revenue categories include stamped metal products, forged metal products, custom roll forming products, and powder metallurgy products. Services may include design engineering, machining, part assembly, and finishing (such as cleaning, welding, or deburring).

Dependence On Manufacturing Activity And The Economy

Demand for forged and stamped products is driven by manufacturing volume, which is vulnerable to changes in economic conditions.

Capital-Intensive

The forging and stamping industry is highly capital-intensive and requires significant investment in plants, property, and equipment, such as presses, hammers, conveyers and furnaces.

Industry size & Structure

The average forging or stamping manufacturer operates out of a single location, employs 44 workers, and generates $16 million annually.

    • The forging and stamping industry consists of about 2,000 firms that employ 90,800 workers and generate about $33 billion annually.
    • The industry is somewhat concentrated at the top and fragmented at the bottom; the top 50 companies account for 47% of industry revenue.
    • Metal stamping firms account for 36% of industry revenue and 60% of firms; forging firms account for 35% of revenue and 18% of firms; custom roll forming firms account for 22% of revenue and 16% of firms; powder metallurgy manufacturers account for the remainder.
    • Large companies with stamping and forging operations include Mueller Industries and Park Ohio Holdings. Large firms may have international operations. Most forging plants are small or medium-sized companies.
    • Some large customers, such as automobile or aircraft manufacturers, are vertically-integrated and have internal forging and stamping operations.
                                      Industry Forecast
                                      Forging and Stamping Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Nov 3, 2022 - Airbus Leads Race to Produce Smaller Jets
                                      • France’s Airbus is outpacing Boeing in the race to produce smaller jets, The Wall Street Journal reported. Airbus in October confirmed plans to increase production of its A320 aircraft to 65 a month by early 2024 from about 50 a month at the end of this year, one of the fastest increases in its history, according to WSJ. By comparison, Boeing has lowered its guidance for 737 MAX deliveries saying it expects to deliver 375 jets this year, down from the “low 400s” it forecast in July. Boeing, which like Airbus is struggling with supply chain issues, has said it plans to stick to its current monthly MAX production rates in the low 30s for most of 2023. The competition between the aircraft makers is closely watched by suppliers because as the companies ramp up production, they’re able to push for better pricing.
                                      • The recession may be slower to arrive than many expect. The 2.6% increase in real GDP in Q3 2022, according to the Bureau of Economic Analysis’s “Advance” estimate, suggests the US economy has yet to enter recession. Still, given the Federal Reserve’s commitment to bringing down inflation with successive interest rate hikes, a recession is not unlikely, wrote Forbes contributor Bill Connerly in October. However, Connerly doesn’t expect the recession to begin for some time – until late 2023 or early 2024. That timeline would give makers of forged and stamped products and other industries that depend on manufacturing activity and the economy time to prepare their businesses to weather the looming downturn.
                                      • Unlike previous recessions that ended with a net loss of factory jobs, the unique circumstances of the pandemic-induced recession and recovery have resulted in a net gain in factory jobs – although not in the sectors or regions typically associated with manufacturing, The New York Times reports. American manufacturers eliminated roughly 1.36 million jobs from February to April of 2020, as the pandemic shut down much of the US economy. As of August 2022, however, manufacturers had added back about 1.43 million jobs, a net gain of 67,000 workers above pre pandemic levels, according to data cited by NYTs. The current resurgence in factory employment is being driven by recovery in industries including pharmaceuticals, craft breweries and ice-cream makers, NYTs reports. Moreover, the newly-created jobs are more apt to be located in the Mountain West and the Southeastern US than in traditional industrial strongholds of the Great Lakes region.
                                      • When making purchasing decisions, the US government in September 2022 announced it will prioritize the purchase of low-carbon construction materials for federal construction projects as part of its Federal Buy Clean Initiative. The “Buy Clean” announcement was made at the Cleveland-Cliffs’ Toledo Direct Reduction plant, which produces hot-briquetted iron (HBI) used in the production of high-quality iron ore feedstock for cleaner steel production. HBI is integrated into steel plate used in a wide variety of products purchased by the government, including automobiles, electricity grid transformers, bridge decks, offshore wind platforms, naval submarines, and train tracks. Speaking for the industry, AISI President and CEO Kevin Dempsey praised the "Buy Clean" initiative saying it “recognizes the innovations and advancements being made by American steel producers."
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