Every month Chris Kuehl, economic analyst for the Fabricators & Manufacturers Association Intl. and president of Lawrence, Kan.-based Armada Corporate Intelligence, publishes the Armada Strategic Intelligence System (ASIS), in collaboration with Morris, Nelson & Associates, Leavenworth, Kan. In it, Kuehl and his team outline a cross section of manufacturing sectors that touch the metal fabrication business. Throughout 2020 and 2021, nearly all of those sectors have experienced quite a ride. Business fell in early 2020, for obvious reasons, followed by a continued, albeit faltering, rebound as the global supply chain stumbled back to life. Parts of the metal fabrication business are running full out, others aren’t as strong as they could be—if only they had the material and people they needed to get the job done (see Figure 1).
“[We’re seeing continued] strong medium- and long-term demand trends across the end markets we serve, plus an increased interest in our services from a broadening range of companies,” said Bob Kamphuis, chairman/CEO/president of contract fabrication giant MEC, during a quarterly conference call with investors in November. “However, our company’s supply chain constraints have resulted in some near-term volume deferments.” This is happening not because of raw material shortages at MEC, but because of shortages at MEC’s customers.
Kamphuis added that the supply chains feeding MEC’s facilities in Mayville, Wis., and throughout the eastern half of the U.S.—including those for raw material—have caused “only minor disruptions. This means we remain ready when our customers are able to ratchet up their volumes again.”
As one of the largest contract fabricators in the U.S. (and repeatedly the No. 1 company on The FABRICATOR’s FAB 40 list of top fabricators), MEC serves nearly all the sectors in Kuehl’s monthly ASIS forecast, and many in this business likely relate to MEC’s experiences.
U.S. metal fabrication is a manufacturing sector tied to the leash of supply chain disruption. The sector continues to pull, eager to take off. That pull likely will get stronger with further infrastructure spending, thanks to recently passed legislation in Washington. The global supply chain just has to catch up, and until it does, inflationary pressures will continue. Considering all this, 2022 is shaping up to be a year that, while volatile, will be full of opportunity.
Read more: Metal fabrication ready to take off in 2022