New orders still rising through late summer, as manufacturing technology rides multiple indicators of expansion for seventh consecutive month of recover
U.S. manufacturers ordered $380.16 million worth of new machine tools during August, 15.7% more than in July and 14.3% more than in August 2016. According to AMT – the Assn. for Manufacturing Technology, the results continued the ongoing recovery in the sector, which struggled to maintain growth in the previous three years, owing to uneven demand from domestic manufacturing.
AMT issues the monthly U.S. Manufacturing Technology Orders (USMTO) report that summarizes actual totals for machine tool sales, nationwide and in six regions. The figures are reported by participating companies that produce and distribute metal-cutting and metal-forming and -fabricating equipment, including domestically manufactured and imported machinery and equipment.
“The 16% growth in orders in August was surprising as orders tend to slow during the summer months,” commented AMT president Doug Woods.
Through the first eight months of 2017, new orders for machine tools total $2.78 billion, which is 11.2% higher than the January-August 2016 total.
Despite the year-to-date improvement, AMT suggested that the coming months may be “rocky” but that orders will continue to rise into 2018.
“Meetings with our industry’s top executives at the European manufacturing technology show in Hannover, EMO, were peppered with optimism for continued growth through the rest of 2017 and into 2018,” Woods commented. “Still, Washington can shore up that optimism if they can find the will to collaborate on tax reform to build an even stronger basis on which to invest in U.S. manufacturing capacity.”
As for future demand, AMT related anecdotal informant from individual members describing a “sudden slowdown in orders from the automotive industry during August, which fell by nearly 30% from July.” Even so, August orders continued to expand thanks to a significant increase in orders placed by job shops, power-generation industry suppliers, and a number of “significant aerospace projects.”
Also, leading indicators point to an improving market environment that would support an expansion of capital spending on additional capacity in the durable goods industry, according to AMT. These indicators include corporate profits for durable goods manufacturers (+5% during Q2, +11% y/y.)
The Association also cited the Institute for Supply Management’s Purchasing Managers Index, which rose above 60 in September, the first time since June 2004.
“The conclusion I draw from the USMTO data is that the U.S. market for manufacturing technology is in the midst of a significant recovery, and our leading indicators support that statement,” stated AMT vice president, Strategic Analytics, Pat McGibbon. “The U.S. isn’t alone in this recovery, as nine out of 10 of our peers from the top 10 manufacturing technology producing nations recently said that their nations’ production levels will rise in 2018.”
AMT’s August regional results were mostly supportive of the expansion evident in the nationwide results. One exception, however, is in the Northeast region: new orders for manufacturing technology in the Northeast fell 6.4% from July to $64.4 million during August. That total is 12.1% higher than August 2016, but the year-to-date total for the region is $485.2 million, down 3.8% year-over-year.
In the Southeast, new orders for manufacturing technology totaled $42.74 million, up 20.2% from July but down 34.6% from August 2016. The regional YTD total is $343.44 million, 1.5% less than last year’s eight-month total.
In the North Central-East region, new orders totaled $94.77 million, up 5.4% from July and up 11.0% from August 2016. The year-to-date total is now $705.18 million, up 14.5% from last year’s comparable total.
In the North Central-West region, new orders for metal-cutting machinery totaled $66.23 million, up 23.8% from July and up 24.4% from August 2016. The total manufacturing technology orders for the year-to-date in the region stand at $489.06 million, 5.8% higher than last year’s eight-month total.
The South Central region reported new orders for metal-cutting machinery of $47.39 million, up 89.7% from July and up 159.0% from August 2016. Total new orders for manufacturing technology in the region total $267.54 million through August, which is 75.5% higher than last year’s eight-month total.
Finally, in the West region, new orders for metal-cutting machinery rose to $56.84 million for August, up 10.8% from July and up 16.3% from August 2016. Year-to-date new orders for all manufacturing technology in the West region total $492.42 million, up 17.8% versus last year.