U.S. machine shops and other manufacturers ordered $270.9 million worth of new machine tools during February, a decline of 5.1% from the January total and of 12.8% from February 2015. The new result brings year-to-date new orders to $556.43 million, or 16.3% less than the comparable result for January-February 2015.
The figures are drawn from the latest edition of the U.S. Manufacturing Technology Orders report (USMTO), a monthly summary presented by AMT – the Association for Manufacturing Technology. USMTO summarizes actual totals for machine tool orders reported by participating companies that produce and distribute metal-cutting and metal-forming and –fabricating equipment, including domestically manufactured and imported machinery and equipment. USMTO is an indicator of capital investment (not manufacturing activity), reflecting manufacturers’ confidence in current and developing economic conditions.
AMT observed that the February results, the second-consecutive decline in new orders, and the fourth decline in the previous six months, reflects the U.S. manufacturing sector contending with the effects of a strong currency and weak global demand. However, the Institute for Supply Management’s Purchasing Managers’ Index (PMI) improved during February for the first time since July 2015, suggesting changing conditions on the demand side of the industrial economy. AMT also offered that rising commodity prices (among other indicators) hint at improving conditions for some U.S. industrial sectors, citing mining, construction, and agriculture.
AMT also pointed to improvements in European and Japanese industrial activity: Europe’s PMI readings also showed moderate growth, it noted, and many Japanese manufacturers frequently record improved order activity at the end of their fiscal year.
However, the group also acknowledged that the Chinese economy continues to show weakness, along with other emerging economies.
“We’ve seen some better news about manufacturing, especially for the domestic market, but the industry will continue to face a number of economic challenges through much of the year,” commented AMT president Douglas K. Woods. “Our members are reporting more quotation activity for their products and equipment and we expect an expanded market for manufacturing technology towards the fourth quarter.”
Woods continued: “Additionally, a recent surge in housing starts is anticipated to give a boost to consumer spending, and the March PMI showed expansion in the manufacturing sector for the first time in six months.”
The USMTO also includes summary results of machine tool orders in six regions: according to AMT, new orders in various regions reflects improving demand from the automotive, medical, and aerospace customers, “particularly in the Southeast,” it offered.
In the Northeast region, new orders for metal cutting machinery fell 26.0% from January to $40.65 million, and that figure is 32.5% less than the February 2015 new-order total for the region. For the first two months of 2016, the total value of new orders metal cutting machinery in the Northeast region is $95.58 million, or 36.1% less than the comparable January-February 2015 figure.
In the Southeast, new orders for metal cutting machinery rose 5.4% to $41.06 million. That figure is 35.0% higher than the February 2015 total, and brings two-month total for metal cutting machinery orders in the region to $80.01 million, 41.8% higher than the two-month result for 2015.
The North Central-East region reported total manufacturing technology orders of $79.64 million during February, 13.5% higher than during January, and 4.9% higher than during February 2015. For the year-to-date, the region’s new orders for manufacturing technology stand at $149.82 million, or -10.4% compared to January-February 2015.
In the North Central-West region, February new orders for metal-cutting machinery totaled $44.34 million, declining from January by 2.3%, and from February 2015 by 41.3%. The two-month total for metal-cutting machinery orders in the region is $89.71 million, or 3.4% less than the January-February 2015 total.
The South Central region’s February total for new orders of metal-cutting machinery is $17.44 million, up 27.2% from January, but down 33.1% from February 2015. AMT noted that South Central region showed a gain in orders “driven by the oil-and-gas exploration industry, thanks to a recent boost in oil prices.” South Central regional YTD results for new orders of metal-cutting machinery were $31.15 million, -42.4% compared to January-February 2015.
The West region’s February new orders of metal-cutting machinery fell 14.2% from January, to $43.27 million. That figure is 15.4% higher than the February 2015 new-order total, and brings year-to-date new orders for metal-cutting machinery in the region to $93.67 million, up 5.1% from January-February 2015.