US Machine Tool Orders Down 25% for April

June 13, 2016
AMT sees sluggish economy dragging manufacturing technology orders Total orders $284.10 million Reflecting “larger stagnation” Areas of growth are less influential
USMTO data is a leading economic indicator as manufacturing companies make capital investments in new metalworking equipment, to increase capacity and to improve their current performance.

U.S. machine shops’ and other manufacturers’ new orders of metal cutting and similar manufacturing technology totaled $284.10 million during April, declining 25.5% from March, and falling 27.5% from the April 2015 result. The latest monthly total brings the year-to-date value of new machine tool orders to $1.23 billion, which is down 16.6% compared to the January-April 2015 report.

“The current conditions for manufacturing technology providers are a reflection of larger stagnation in manufacturing and the overall economy – some industries are performing well, and others
are struggling,” stated president of AMT – the Association for Manufacturing Technology.

AMT’s monthly U.S. Manufacturing Technology Orders report 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.

The USMTO is used as a forward-looking indicator of manufacturing capital investment, as companies place orders for new equipment to increase capacity and to improve current capabilities.

As such, the “slow growth” pattern in most major U.S. industries has impacted the manufacturing technology sector in a sustained way.

“Automotive and aerospace, which mitigated the market decline for the last 15 months of the current downturn, continue to hold their own but they aren’t growing,” according to AMT’s Woods. “Some industries are growing, such as consumer electronics, firearms, and medical, but those represent only 12 percent of our overall market. Weakness continues in the oil and gas and construction/off-road industries.”

In its announcement, AMT noted that industrial-market forecasters still predict an increase in activity later this year, but it added that the current market downturn is more severe than most had forecast. “AMT member companies report strong levels of quotation activity, but longer conversion rates for order placement,” it added. “Manufacturing companies are resistant to make investments in capital equipment out of a sense of caution.”

The USMTO program also reports monthly new-order activity for metal-cutting and metal-forming and fabricating equipment, in six regions of the U.S., which provides some insight to the manufacturing sectors in those areas of the country. In the Northeast, for example, April new orders for metal cutting equipment fell to $58.18 million, down 31.1% from March and down 5.3% from April 2015. For the January-April period in the Northeast, total new orders stand at $243.07 million, which is 16.8% less than last year’s four-month total.

In the Southeast, new orders for metal cutting technology during April were worth $28.86 million, 17.2% less than during March and 14.8% less than during April 2015. For the year-to-date, the region’s total new orders are $154.68 million, up 19.8% compared to the comparable period of 2015.

In the North Central-East region, manufacturing technology orders totaled $66.24 million during April, which is 35.1% less than the March result and 50.3% less than the April 2015 result. The four-month total for 2016 is $317.84 million, or 24.8% less than last year’s January-April total.

The North Central-West region reported total manufacturing technology orders of $49.51 million, 34.0% less than during March and 30.2% less than during April 2015. The year-to-date total is $223.4 million, or 23.6% less than the result for January-April 2015.

Metal-cutting equipment orders in the South Central region during April fell 16.6% from March, to $20.72 million. That result is 46.0% less than the April 2015 total. For the first four months of this year, South Central regional metal-cutting new orders are valued at $77.93 million, which is down 37.1% versus last year’s comparable figure.

Finally, in the West region, April new orders for metal-cutting equipment fell 9.2% from March to $52.51. That figure signifies an 8.2% improvement over the total for last April. For the year-to-date, the region has posted new orders for metal-cutting equipment worth $207.73 million, nearly even (+0.3%) with the four-month total for 2015.

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)

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