The metal products industry is expecting a downturn in business during the next quarter of a year, thanks to many companies being wary of the looming debt crisis and political dysfunction throughout Europe.

American companies are especially cautious, with a recent survey of 132 companies carried out by the Precision Metalforming Association found that only 11% expected economic activity within the industry to improve, which is down on the 20% of October. A further 30% predicted that they would see a decreased in orders, whilst the rest believe the market will simply stagnate.

“Our members are signalling caution regarding the general economy, most likely because it continues to be impacted by political dysfunction,” said William Gaskin, president of the Precision Metalforming Association.

Despite this, overall business in the sector seems to be pretty good, with the typical PMA member reporting a 12% growth in product shipments.

However Ken Brusda, president of North Star Asset Management in Menasha, points to the European situation as the reason why many companies are wary. He states “I think everyone’s a bit cautious on the outlook because there’s so much uncertainty, primarily coming out of Europe and the constant credit crisis and debt crisis they seem to be in.

“Europe is really sluggish and may end up in recession in 2012. Our economy is plodding along at a reasonable pace and will probably grow 2% to 2.5% in real Gross Domestic Product next year.

“The wrench in the works could be Europe, if their problems spill over.”