Domestic manufacturers ordered $373.19 million worth of new metal-cutting machine tools during during June, 7.0% higher than the May total and 12% higher than the June 2016 total. Through the first six months of 2017, total U.S. machine tool orders stand at $2.04 billion, which is 7.1% higher than the January-June 2016 new-order volume.
New orders for machine tools, or "manufacturing technology," are an indicator of manufacturing growth, as machine shops and other manufacturers prepare for current or anticipated production programs.
The Association for Manufacturing Technology issues the monthly AMT’s monthly U.S. Manufacturing Technology Orders (USMTO) report, an account of actual totals for machine tool sales, nationwide and in six regions, as 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 June release of the USMTO declared, “It’s official — Expansion in U.S. manufacturing technology orders accelerating,” and identified the fifth consecutive monthly increase in year-over-year new-order volumes.
AMT traced the long recovery of machine-tool demand, starting in 2014 with a midyear drop in oil prices and related demand for drilling and processing activity. “Orders peaked on a monthly basis that September (2014) at $643 million and bottomed out at $260 million in June 2016,” the trade association recounted.
The current recovery may be traced to September 2016, but year-over-year new-orders for manufacturing technology did not indicate any consistent improvement until March of this year. AMT noted, "key indicators that businesses in the manufacturing technology sector rely on have been improving steadily,” and cited housing starts as further evidence of continuing strength of consumer confidence.
“If the USMTO numbers aren’t convincing enough that a recovery is underway, certainly the buzz among our members underscores that a recovery is indeed underway,” commented AMT president Doug Woods.
“Members have shared that the aerospace supply chain in the Midwest is hot,” he noted. “Auto orders doubled between May and June, and sales in the Southeast exploded. Over the next six months, they look forward to a broadening of the recovery into areas like agricultural, construction, power generation, and off-road machinery industries.”
Even so, the current expansion activity appears to be much stronger in some regions (e.g., South Central) than in others (Northeast), suggesting the comparative robustness of the industries characterizing the regional manufacturing sectors.
Mark Killion, director of U.S. Industries for Oxford Economics, noted, “Recent increases in new orders for machine tools are supported by a better environment for business investments in the U.S. and globally, especially in the sectors for metals products, electrical and industrial machinery,” offered Mark Killion, Oxford Economics’ director of U.S. Industries.
June new orders for metal-cutting machinery in the Northeast region totaled $55.57 million, down 3.7% from May’s results and down 30.6% from June 2016. For the year-to-date, the region’s new orders for metal-cutting machinery stand at $338.07 million, down 12.0% year-over-year.
The Southeast region reported new orders for metal-cutting machinery amounting to $47.71 million, 33.2% higher than the May total and 27.7% over the June 2016 total. The region’s total new orders for manufacturing technology during the first half of 2016 are valued at $260.92 million, 10.2% higher than the comparable total for January-June 2016.
The North Central-East region’s June new orders for metal-cutting machinery rose to $109.00 million, up 40.5% from May and 25.3% from June 2016. The region’s year-to-date total for metal-cutting machinery new orders is $493.66 million, up 6.8% over the comparable six-month period of 2016
In the North Central-West region, new orders for metal cutting machinery fell to $68.37 million during June, down 16.2% from May and yet 27.7% higher than the June 2016 result. Through the first six months of this year, new orders for metal-cutting machinery in the region total $353.99 million, 4.8% higher than the comparable result for 2016.
The South Central region’s new orders for metal-cutting machinery during June totaled $25.99 million, which is 14.0% below the May total but 18.75% higher than the June 2016 figure. For the January-June period, new orders for metal-cutting machinery in the South Central region stand at $183.16 million, 57.9% higher than last year’s six-month result.
Finally, in the West region, new orders for metal-cutting machinery totaled $55.73 million, essentially unchanged (-0.2%) from May but 19.1% higher than the June 2016 total. Year-to-date new orders for all manufacturing technology in the West region are up to $370.01 million, 14.2% higher than the January-June 2016 total.