NTMA BUSINESS CONDITIONS REPORT Prepared February 2015 (for the - PDF document

NTMA BUSINESS CONDITIONS REPORT Prepared February 2015 (for the period ending December 31, 2014) � Overall Survey Results � Results by Industry Segment � Results by Geographic Region � Member Comments by Industry Segment

February 2015 This NTMA Business Conditions Report covers the second half of 2014, a projection for the first half of 2015, and is a geographical “snapshot” of business trends and conditions in the special tooling and machining industry. This Report, based on information from 133 NTMA member companies, indicates that overall business conditions during the 6 ‐ month period ending December 31, 2014 were Very Good to Excellent for 36% of respondents. This is a slight decline from the 38% who reported Very Good to Excellent business conditions at mid ‐ 2014. However, 58% of respondents anticipate that the next six months will bring a moderate ‐ to ‐ substantial increase in business conditions. Key business priorities remain unchanged from the June 2014 and December 2013 reports: • #1: Increase Sales: Seek to identify new business, especially with strategic, long term contracts • #2: Increase Productivity: Need productivity, including lean, cost reductions, & improved output per person were critical to most • #3: Finding Skilled Employees. Limited by shortages of skilled machinists, programmers, and processing engineers Average work week hours per employee remained at 44.4. Future work on the books decreased from 17 weeks to 16 weeks. And, Average Sales Per Employee rebounded to $141,648 in the December survey from $128,618 in June. A special thanks to the 133 NTMA member companies that participated in the December 2014 NTMA Business Conditions Report. We appreciate your support of this important benchmarking survey and encourage non ‐ participating members to join the next survey in June. Sincerely, Dave Tilstone President

February 2015 NTMA Business Conditions Report Based on responses from 133 NTMA member companies (for the 6-month period ending December 31, 2014) Current Business Conditions Projected Business Conditions (All Segments & Regions) Over Next 6 Months Excellent 8% Substantial Increase 7% Very Good 50% 28% Moderate Increase 44% Good Remain the Same 32% Fair 15% Moderate Decrease 9% Poor 5% Substantial Decrease 2% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 51 47 47 39 37 37 35 33 34 29 28 25 24 20 14 Quoting Shipments Order Backlog Profits Employment Future Work on Books (Average): 16 Weeks Current Average Workweek per Skilled Employee (hours per week): 44.4 Total number of employees as of June 30, 2014: 5,147 Total number of employees as of December 31, 2014: 7,582 Sales Per Employee: $141,648.63

Capacity Plans: Machines Capacity Plans: Buildings Add Capacity This Quarter 17% Add Capacity This Quarter 2% Add Capacity Next Quarter 23% Add Capacity Next Quarter 5% Add Capacity 1 Year or Later 27% Add Capacity 1 Year or Later 12% Remain the Same 80% 33% Remain the Same Reduce Capacity 0% Reduce Capacity 1% Sellable Production Capacity Proactive Selling & Business Development Activity >80% - Tight 33% 70% 61% 60% 70% - Increasing 35% 50% 37% 40% 60% - Opening 25% 30% Up 20% <50% - Need 10% 2% 7% Work 0% Increasing - More Low Level - Declining - Cutting back selling efforts and Opportunistically on selling efforts investment pursuing leads Q15. Our priorities for our business for this quarter are (rank 1-6, with 1 being the highest priority) Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Weighted Rank Responses (Score) Sales Increases - existing customers 44 30 21 16 16 6 1 (584) Productivity Increases 2 (533) 24 35 25 23 19 7 Finding new customers 3 (486) 21 30 25 17 19 21 Finding skilled employees 30 14 22 18 30 19 4 (471) Cost reductions 10 12 27 40 26 18 5 (418) Leadership staffing 6 (301) 4 12 13 19 23 62 Total Responses 133

BUSINESS CONDITIONS (By Industry Segment) TOOLS, DIES & FIXTURES (13 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 0% Substantial Increase 0% Very Good 46% 54% Moderate Increase 31% Good 38% Remain the Same Fair 15% Moderate Decrease 8% Poor 8% Substantial Decrease 0% Current Business Conditions Compared withThird Quarter 2014 (by %) Up Same Down 54 46 46 46 38 38 38 38 38 31 23 23 15 15 8 Quoting Shipments Order Profits Employment Backlog MOLDS (10 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 10% 30% Substantial Increase Very Good 40% 40% Moderate Increase Good 50% 20% Remain the Same 0% Fair Moderate Decrease 10% Poor Substantial Decrease 0% 0% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 80 70 60 60 50 40 40 30 20 20 10 10 10 0 0 Quoting Shipments Order Backlog Profits Employment

SPECIAL MACHINES (4 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 25% 50% Substantial Increase Very Good 25% 25% Moderate Increase 25% Good 0% Remain the Same Fair 25% Moderate Decrease 25% 0% Poor Substantial Decrease 0% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 75 75 75 50 50 50 25 25 25 25 25 0 0 0 0 Quoting Shipments Order Profits Employment Backlog PRECISION MACHINING (excluding Aerospace) (68 responses) Projected Business Conditions Over Current Business Conditions Next 6 Months Excellent 6% Substantial Increase 6% 25% Very Good Moderate Increase 53% Good 44% Remain the Same 29% Fair 18% Moderate Decrease 10% 7% Poor Substantial Decrease 1% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 50 47 44 40 38 32 32 31 29 29 29 29 26 21 21 Quoting Shipments Order Backlog Profits Employment

AEROSPACE MACHINING & FABRICATION (34 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 15% Substantial Increase 3% Very Good 26% 50% Moderate Increase 44% Good Remain the Same 38% 12% Fair Moderate Decrease 6% 3% Poor Substantial Decrease 3% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 50 47 47 44 41 41 41 38 29 26 26 24 21 18 6 Quoting Shipments Order Backlog Profits Employment METAL FABRICATION & STAMPING (4 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 0% Substantial Increase 0% Very Good 0% Moderate Increase 50% 75% Good Remain the Same 50% Fair 25% 0% Moderate Decrease 0% Poor 0% Substantial Decrease Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 75 75 50 50 50 50 50 25 25 25 25 0 0 0 0 Quoting Shipments Order Profits Employment Backlog

BUSINESS CONDITIONS (by Geographic Region) NEW ENGLAND (ME, VT, RI, NH, MA, CT) (9 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 0% 11% Substantial Increase 11% Very Good Moderate Increase 44% Good 78% 22% Remain the Same Fair 11% Moderate Decrease 11% Poor 0% Substantial Decrease 11% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 100 44 44 44 44 44 44 44 33 11 11 22 11 0 0 Quoting Shipments Order Profits Employment Backlog NORTHEASTERN CENTRAL (DC, NY, PA, NJ, DE, MD, WV, VA) (28 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 7% Substantial Increase 7% 29% Very Good Moderate Increase 50% Good 36% Remain the Same 36% 21% Fair Moderate Decrease 7% Poor 7% Substantial Decrease 0% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 46 39 43 43 39 36 36 32 32 32 29 21 21 29 21 Quoting Shipments Order Profits Employment Backlog

SOUTHEASTERN (FL, KY, NC, SC, TN, GA, AL MS) (4 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 25% Substantial Increase 25% Very Good 50% Moderate Increase 50% Good 25% Remain the Same 25% 0% Fair Moderate Decrease 0% Poor 0% Substantial Decrease 0% Current Business Conditions Compared with Third Quarter 2014 (by %) Up Same Down 75 75 75 50 50 50 25 25 25 25 25 0 0 0 0 Quoting Shipments Order Profits Employment Backlog NORTH CENTRAL (OH, MI, IL, IN, WI) (33 responses) Current Business Conditions Projected Business Conditions Over Next 6 Months Excellent 7% Substantial Increase 0% Very Good 26% 40% Moderate Increase 38% Good Remain the Same 48% Fair 29% Moderate Decrease 12% 0% Poor Substantial Decrease 0% Current Business Conditions Compared with First Quarter 2014 (by %) Up Same Down 64 48 45 45 42 39 39 36 39 24 21 12 15 12 15 Quoting Shipments Order Profits Employment Backlog