Sheet Metal Work

SIC 3444

Companies in this industry

Industry report:

This industry encompasses companies primarily engaged in manufacturing sheet metal work for buildings (not including fabrication work done by construction contractors at the place of construction), as well as stovepipes, light tanks, and other products of sheet metal.

Industry Snapshot

According to industry statistics from Dun and Bradstreet, there were an estimated 5,917 establishments engaged in manufacturing sheet metal work for buildings (not including fabrication work done by construction contractors at the place of construction) in 2010 with revenues of more than $10.7 billion employing 115,838 workers. States with the highest concentration of establishments in this industry were California (15 percent), Texas (8 percent), Florida (5 percent), Pennsylvania (4 percent), and Ohio (4 percent). California accounted for the most sales, with $1.5 billion, followed by Texas with $898.5 million, New York with $593.3 million, and Illinois with $506 million.

The most common end uses for sheet metal have been electronic enclosures, such as personal computer housings or casings; roofing and roof drainage equipment; air conditioning ducts and stovepipes; sheet metal flooring and siding; awnings, canopies, cornices, and soffits; culverts, flumes, and irrigation pipes; and other or unspecified uses. These categories cover a myriad of products used by every industry, including aircraft manufacture (air cowls); building construction (siding, stove hoods, and gutters); heating, ventilation, and air conditioning (HVAC) applications (ducts, furnace flues); mineral processing (coal chutes); highway construction (guardrails); agriculture (irrigation pipes); business machines (computer casings); shipbuilding (ship ventilators); postal delivery (mailboxes); and food preparation (vats and bins).

Organization and Structure

Sheet metal forming is one of the most basic and pervasive manufacturing processes in U.S. industry. In general, sheet metal products manufactured by industry firms have thin walls, simple as well as complex designs, and a large quantity of surface area in relation to thickness. They generally are lighter in weight and are more versatile than metal products formed and shaped through casting and forging processes. The manufacture of sheet metal products is generally characterized by low to moderate costs for labor, equipment, and dies.

Industry sheet metal products are manufactured with a wide range of metal-forming machine tools. Different techniques can be used to produce the same sheet metal part. The factors determining which method to use include the cost of the die, the amount of labor available, the number of sheet metal parts to be made, and the speed of production. Deep-drawing methods, for example, involve more complicated machinery and cost more than other methods, but they are also faster and more cost-effective for jobs involving the manufacture of many parts.

Background and Development

Sheet metal work experienced a strong market in the late 1990s, fueled by the booming U.S. economy. At the time, the industry used 45 percent of the value of its shipments on materials and supplies, primarily from blast furnaces and steel mills and aluminum rolling and drawing companies. Low-carbon steel was the most widely used metal for sheet metal processes because of its low cost and high strength and formability. HVAC systems and business/computer machines were the two largest buyers of the sheet metal work industry's products, and demand for HVAC systems and computer goods remained high at the end of the century. Moreover, when the economy weakened at the beginning of the twenty-first century, falling interest rates bolstered new home and building construction, which in turn fostered demand for many sheet metal work products for roofing and siding.

Demand for steel sheet metal work was especially robust, and a slew of companies worked to fill consumers' needs. The supply of steel sheet metal rose in the late 1990s and the early years of the first decade of the 2000s as less expensive imported steel flooded the U.S. market. At the same time, U.S. production capacity expanded as a result of a new generation of new steel "mini-mills." Both factors kept steel prices low. Although domestic steel producers suffered, sheet metal work industry firms benefited from the low prices of steel sheet metal needed for their work.

The sheet metal industry experienced steady, uninterrupted growth in the late 1990s. Shipment values jumped from $15.5 billion in 1997 to $19.3 billion in 2000. The industry suffered a downturn in the early 2000s and shipped products worth $14.4 billion in 2002, but shipments were back up to $19.4 billion by 2005.

As the economy began to improve in the early 2000s, and with it, the construction and manufacturing sectors, the sheet metal industry also experienced growth. Because of the importance of HVAC systems and business/computer machines to the U.S. economy, these two largest buyers of the sheet metal work industry's products were important customers. The boom in the housing and construction market greatly aided the industry through the mid-2000s, before the economy came to a screeching halt. Recessionary conditions kept demand in sheet metal from building, roofing and siding, and HVAC virtually at a standstill. "Given the bleak outlook for the U.S. manufacturing and construction sectors, U.S. galvanized sheet production will remain at depressed levels for much of this year," Andrew Thomas, analyst at market researcher Brook Hunt & Associates, noted in Purchasing in July 2009, adding, "given the likely loss of automotive production capacity during the wholesale restructuring of the industry, it seems unlikely that the 16.3 million tons/year average annual shipment rate reached in the first seven years of this decade will ever be reached again." Indeed, the value of shipments for the sheet metal work manufacturing industry dropped to $16.7 billion in 2009, according to the U.S. Census Bureau.

Current Conditions

By 2010, the U.S. economy, along with the sheet metal and other manufacturing industries, was beginning to recover. That year, 3,828 sheet metalwork companies accounted for 67 percent of industry revenues and employed 72,847 people. A distant, but important, sector was the 407 companies that engaged in sheet metal specialties, not stamped, with revenues of about $1.2 billion and 9,528 workers. Although the industry remained highly fragmented, there were other significant sectors, including manufacturers of metal housings, enclosures, castings, and other containers, with sales totaling $353.5 million, and sheet metal duct manufacturers, with revenues of $307.4 million. Most companies in the sheet metalwork industry in 2010 were small, with 77 percent employing fewer than 25 workers. Companies with more than 25 workers, however, accounted for about 65 percent of industry sales.

According to a 2011 report from IBISWorld, including window and door manufacturing, the sheet metal industry was expected to improve into the 2010s, aided by the recovery of the housing market and the economy in general. Although increasing prices of aluminum and steel will cut into companies' profits, overall revenues were expected to rise. Other challenges will be prevalent, however. For example, according to the report, "increasing imports will threaten industry growth over the next five years, as Canada and China fulfill a larger portion of domestic consumption."

Industry Leaders

New York-based Alcoa Inc. was one of the industry leaders in the early 2010s. Revenues in 2010 totaled $16.4 billion with 59,000 employees. Alcoa served the aerospace, automotive, and construction industries. Although it operated in about 30 countries, Alcoa gained half of its sales from the United States. Another important company was Wise Alloys LLC based in Muscle Shoals, Alabama, which reported revenues of $92.7 million in 2010 with 1,007 employees. The company produced wide aluminum sheet used in architectural applications and beverage cans, as well as roofs for truck trailers, among other products.

Workforce

Together with the metal window and door manufacturing and ornamental and architectural metal work manufacturing industries, the sheet metal work industry employed 213,820 in 2005, down from 223,883 in 2002. According to the Sheet Metal and Air Conditioning Contractors' National Association (SMACNA), the biggest problem facing workers in the industry in the early twenty-first century was not so much dropping employment levels in general as competition from nonunion workers.

The vast majority of the nation's sheet metal employees worked for firms outside the sheet metal industry, such as on-site construction contractors or in the plumbing and HVAC business. Sheet metal production workers made up an important segment of the U.S. sheet metal workforce and were represented in part by the Sheet Metal Workers' International Association (SMWIA), formed in Toledo, Ohio, in 1888. Sheet metal workers often learned the trade through apprenticeships involving four to five years of combined classroom and on-the-job training.

Research and Technology

Technological advances in the sheet metal work industry in the late twentieth century revolutionized the efficiency and precision with which sheet metal products were fabricated. These advances centered in large part on improving tools, dies, and other equipment; relying more extensively on automated machinery; and embracing the benefits of the computer, new software, and the Internet for marketing purposes.

A turret punch press introduced in the 1990s allowed machine tool operators in the sheet metal industry to punch, cut, separate, and sort finished metal blanks in a single operation rather than the three-part operation previously required. The 21 hole-punching tools of the machine could be adjusted to perform simple unsupervised operations or more complicated processes involving automatic part retrieval and storage. Even more impressive was the Trumatic 2000 Rotation compact punching and forming machine, which was introduced in 1998 by German tool manufacturer Trumpf GmbH & Co. The Trumatic 2000 could punch up 900 hits per minute, and it could make prototypes as well as medium production runs. Similarly, electromechanically operated industrial robots were used extensively to accurately and tirelessly perform the continuous machining motions once performed by humans.

Although Japanese and European firms led U.S. manufacturers in the use of laser-cutting technology for cutting sheet metal to product specifications in the early 1990s, the United States gained ground on its foreign competitors in this crucial manufacturing technology as the decade progressed. In the mid-1990s, an Ohio State engineering professor began experimenting with the use of lasers and light-emitting diodes (LEDs) to detect the wrinkles that develop when the pressure exerted by a die is inappropriately calibrated to the strength of the sheet metal being pushed into it. By detecting wrinkles instantaneously, just as they begin to occur, the sensors enabled a computer to automatically readjust the pressure on the metal before the wrinkles marred the sheet. A laser application, developed in the mid-1990s for sheet metal work in the aerospace industry, combined the precision and automation of laser technology for finishing and trimming metal parts with the design and efficiency benefits of CAD/CAM (computer-aided design/computer-aided manufacture) software to reduce project lead time by two-thirds and costs by up to one-fourth. In 1998, Rofin-Sinar and the Frauenhofer Institute of Germany debuted a multi-kilowatt diode-pumped Nd:YAG laser for industrial processing.

In response to the need to cut costs and increase equipment durability, some industry firms turned to plastics, epoxy, and polyurethane in the 1990s to replace more traditional metallic tools and dies. Software programs using finite element analysis (FEA) enabled product designers to predict the effectiveness of sheet metal stamping dies for the manufacture of products with intricate surfaces and to identify potential strains and stresses in the metal. FEA also enabled manufacturers to accurately predict potential problems in sheet metal bending operations before any metal was actually machined. Software packages such as PE/Sheet Advisor used a combination of "expert system" logic and three-dimensional modeling to enable sheet metal product manufacturers to incorporate data gathered from manufacturing operations into the design of new products.

Large sheet metal operations used central computers to direct all sheet metal-forming operations. This "systems approach" managed entire sheet metal processes using vast unified databases containing information on materials, tool and die parameters, and the mechanical properties of the variables of the sheet metal manufacturing process. The efficiency of such CAD/CAM programs as AutoCAD (the industry standard) was estimated to be four to five times greater than traditional methods. Small to medium-sized firms, which generally were unable to afford the costs of a truly integrated and centralized sheet metal CAM system, could purchase simulation or modeling CAD software to eliminate the costly trial-and-error methods for developing and manufacturing new products. MetalMan, a Windows-based software program for designing sheet metal parts, used a graphic user interface that simulated a machine shop, enabling designers to form three-dimensional solid models of the parts they wished to fabricate, exchange data with other CAD programs, and add to and evaluate new operations in the fabrication process. Such programs also could produce cost quotes and estimates, maintain manufacturing schedules, keep inventories, and generate specification reports for each part.

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