U.S. machine shops and other manufacturers ordered $370.98 million worth of new machine tools during March, an increase of 36.9% over their February orders, according to the latest results form the U.S. Manufacturing Technology Orders report. It’s a result that upholds the positive interpretation of the February Cutting Tools Market Report, though the latter is an index of current market conditions while the USMTO portrays manufacturers’ confidence in current and developing economic conditions.
The March order total is down 11.8% compared to March 2015, and the three-month (January-March) total for new orders is $922.67 million, down 15% versus the comparable figure ($1.08 billion) for 2015.
The 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.
Noting that the March results compare unfavorably to the year-on-year and year-to-date results, AMT – the Association for Manufacturing Technology emphasized that many manufacturing technology firms close their fiscal year on March 31, which drives order activity, and stated flatly that, "overall, the immediate industry outlook remains flat."
"While dealing with persistent economic challenges and a softer market that’s likely to last into the fourth quarter, manufacturers are leveraging productivity gains to stay competitive,” commented AMT president Douglas K. Woods. “The outlook from industry economists improves toward year’s end on two particular strengths of the U.S. economy: foreign direct investment and a resurgent consumer base. For now, manufacturing technology makers are focused on finding markets that offer the best opportunity, like automotive, aerospace and medical. Sentiment among manufacturing executives remains optimistic about future capital equipment investment.”
AMT also pointed to economic data from the manufacturing sector that it called "tepid." Among these, Institute for Supply Management’s Purchasing Managers Index fell below expectations (50.8%) for April; and, the Federal Reserve Bank’s regional surveys for April were "mixed."
However, AMT called manufacturing export orders (which rose to a 17-month high during April) “one bright spot.”
The USMTO report details monthly new-order activity in six regions of the U.S., which provides some insight to the manufacturing sectors in those areas of the country. During March, new orders for metal-cutting equipment in the Northeast totaled $84.05 million, 103.2% higher than during February and 14.9% higher than during March 2015. AMT noted the particularly strong result was driven by demand from aerospace manufacturers. For the year-to-date, the region’s new orders for metal-cutting equipment total $178.19 million, down 19.5% from January-March 2015.
In the Southeast region, March new orders for metal-cutting equipment fell 16.1% from February to $34.55 million, which is essentially even (+0.1%) with the March 2015 result. However, according to AMT, the Southeast is the only region that has shown a year-to-date gain in orders — up 93.65% to $117.73 million for January-March — attributable to aerospace and automotive industries’ demand.
In the North Central-East region, total new orders for manufacturing technology during rose 17.2% from February, to $92.75 million. That result is down 24.2% from March 2015, however, and the regional year-to-date total is now $237.72 million, down 17.9% from January-March 2015.
In the North Central-West, March new orders for metal-cutting equipment increased 68.4% for the month, to $74.47 million, which is 11.8% lower than the March 2015 figure. For the current year to date, the region’s manufacturers have ordered $164.07 million worth of new equipment — 25.1% less than last year over the comparable three months.
In the South Central region, new orders for metal-cutting equipment rose to $24.81 million during March, up 41.2% from February, but down 17.6% from March 2015. The three-month total for 2016 is $56.09 million, or 34.3% less than the same figure for 2015.
Finally, the West region recorded new orders for metal-cutting equipment totaling $57.18 million during March, up 32.3% from February. The January-March regional total is $150.35 million, down 5.2% from last year’s three-month result.