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Machine Tool Orders +40% Higher at Midyear

Aug. 10, 2021
With demand growing for valves, hardware, and other low-complexity, high-volume parts, manufacturers are preparing for sustained expansion, and manufacturing-technology orders now exceed the pre-pandemic trend.

U.S. manufacturers’ new orders of machine tools rose to $490.3 million during June, up 8.9% from May and 41.7% from June 2020. Even more encouraging, the year-to-date total for new manufacturing technology orders increased to $2.509 billion, a rise of 48.6% over the January-June 2020 total.

“The manufacturing technology industry has rebounded from the pandemic-induced recession in a phenomenal way,” stated Douglas K. Woods, president of AMT – the Assn. for Manufacturing Technology. “The first half of 2021 is only 3% below 2018, when orders were at a two-decade high. Not only has the industry recovered from the 2020 slump, but orders are now exceeding the pre-pandemic trend.”

The data is reported by AMT in its monthly U.S. Manufacturing Technology Orders Report, a forward-looking index to manufacturing activity presenting actual data for capital investments in new machine tools. The total reflects machine shops and other manufacturers planning for future work orders – specifically, new orders of metal-cutting and metal-forming and -fabricating equipment.

The USMTO report includes data for new orders nationwide and in six geographic sectors, based on information supplied by participating producers and distributors of that equipment.

Woods detailed that the June new orders indicate a increasing trend of manufacturers’ “reshoring” their activity, meaning reassigning their orders to domestic suppliers.

“In May 2021, we noted the increase in orders for manufacturers of metal valves. In a similar fashion, manufacturers of hardware, springs, screws, nuts, and bolts have significantly increased orders in June 2021. These low-complexity, high-volume parts can be shipped within weeks of a machine being delivered. Production of these commodity parts domestically appears to be an effort by manufacturers to diversify their supply chains in response to the global climate of material and shipping constraints.

“In addition to metal parts, demand for petroleum products up and down the supply chain has driven the price of crude oil to the highest level since October 2018,” Woods continued. “In order to meet this need, manufacturers of oil and gas field equipment have also increased orders dramatically.”

Woods further described growing demand for parts required for medical technology. “We also note that medical equipment manufacturers increased orders substantially in June, with orders up almost 60% compared with the first half of 2020,” he said. “While manufacturers were in a sprint to produce PPE and ventilators this time last year, we’re seeing more sales of multi-function machines as the items produced are shifting back to components required for delayed elective surgeries.”

On the latter point, Woods cited research indicating a rising backlog for knee- and hip-replacement surgeries, concluding that manufacturers of those parts will enjoy steady demand.

“The current situation in the medical industry is emblematic of what is happening across the economy,” Woods said. “As pandemic restrictions are eased, a massive rebound in demand is putting strain on producers and generating an economy-wide need for additional manufacturing technology.”

The USMTO report’s regional results for June showed the growth was strongest in the North Central-West -- $104.77 million for the month, up 4.0% over May and up 106.8% over June 2020, and at $517.02 million the region’s YTD total is up 92.2%. The North Central-East region’s June new-order total for metal-cutting equipment was $96.03 million, an increase of +2.9% over May and +35.1% over June 2020. The six-month total for metal-cutting equipment in the region is $603.21 million, a 60.6% rise over the first half of last year.

The West region’s new-order total for metal-cutting equipment was $93.89 million during June (+9.1% over May; +8.2% over June 2020; +30.8% YTD.)

In the Northeast, new orders for metal-cutting equipment was $83.6 million, 14.1% higher than May and 28.6% higher than in June 2020. The January-June total for the region is $415.98 million, an increase of 37.4% versus last year.

In the Southeast region, metal-cutting equipment new orders rose to $54.3 million, up 2.3% from May and up 17.5% from June 2020. The six-month total for regional metal-cutting equipment new orders is $273.8 million, a 9.5% increase over 2020.

The South Central region had metal-cutting equipment orders totaling $40.69 million during June, up 5.9% from May and up 74.1% from June 2020. The YTD total for metal-cutting equipment in the region is $189.85 million, a 54.3% increase from 2020.

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