Trends Drive Robust Year for Manufacturing Technology

Dec. 29, 2011
AMT catalogs 2011 strengths, warns of risks for 2012

With 2011 receding and an uncertain business outlook for 2012, AMT – The Association For Manufacturing Technology issued a summary report of the past year, emphasizing “the resurgence of manufacturing following the crash of 2008 is unprecedented.” The group cited year-to-date orders for machine tools and related products (“manufacturing technology”) that exceed $4.5 billion domestically, up 80.5% versus the same period of 2010, and in dollar terms the second highest level in the past 15 years.

Through October, AMT detailed, new orders had surpassed the total value of manufacturing technology orders for 2007.

The trade association also pegged its products to positive trends in U.S. manufacturing, noting strong demand for new machine tools in the Midwest and Central states, paced by rebounding automotive activity and the expanding energy industry.

“It’s long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity. Manufacturing technology provides a foundation for all other manufacturing,” stated AMT president Douglas K. Woods. “These machines and devices are the equipment that turn raw materials such as steel, iron, plastic, ceramics, composites, and alloys from their original state as stock materials into what will become durable goods such as airplanes, cars, and appliances, as well as consumer and other goods that are used every day.”

AMT also tied its members’ positive 2011 results to the overall expansion of U.S. manufacturing, as well as to the “reshoring” phenomena and to rising direct foreign investment in U.S. operation. “When the total cost of manufacturing is calculated, the U.S. is a very favorable environment,” Woods stated. He cited a Boston Consulting Group Study that concludes reshoring may create up to 3 million new jobs in traditional manufacturing sectors like automotive, heavy equipment, electrical equipment, appliances, and furniture.

Another factor favoring U.S. manufacturing that AMT cited is a “weak dollar” that promotes exports of domestically produced goods.

However, despite many advantages, AMT cautioned that the manufacturing technology market will endure slower grow in 2012. According to Woods, “manufacturing in America still needs help. Jobs are an unresolved issue. Despite the high number of Americans out of work, manufacturing jobs continue to go unfilled. That is because the factory floor today is very different from what it used to be. It is awash with new technologies and processes that require advanced training and adaptable skills. We need a “smartforce” of workers who are up to the job.

“Until we take steps to level the playing field for U.S. companies in the global marketplace by eliminating trade barriers, reining in regulations, and lowering taxes for manufacturers, we risk losing ground to our foreign competitors in new markets and industries. We must keep the pressure on our elected officials to come up with a focused plan for moving forward,” he continued.

Woods emphasized that AMT is available to work with federal officials to implement a national manufacturing strategy. “Continued growth in our manufacturing sector is a necessary step on the path to sustainable economic prosperity and worldwide leadership and only achievable through the concerted, collaborative efforts of the stakeholders,” he concluded.