Orders for "manufacturing technology" (capital equipment for metal cutting and metal forming and fabricating) are held by AMT as a leading indicator of industrial activity, as manufacturers invest to complete planned or anticipated production programs. The USMTO report is based on data supplied by participating producers and distributors of metal-cutting and metal-forming and -fabricating equipment.
While there is typically a year-end rise in new orders, as machine shops and other manufacturers take advantage of capital-spending budgets and tax structures to place orders before the turn of a calendar year, 2018 saw declining order totals in each of the last three months.
The decline in U.S. orders has been paralleled by declining order-totals for German and Italian machine-tool builders, though AMT’s Woods noted that "markets in Asia and Europe began contracting in the last third of 2018, which is likely to increase supply in the U.S. The silver lining is that global markets should rebound about the time the U.S. market is expected to begin a short-lived contraction.”
AMT referred to other industrial trends to support its outlook, including the February Purchasing Managers’ Index (from the Institute for Supply Management’s monthly report) registering at 54.2%, meaning that the manufacturing sector continues to expand, but more slowly. The same series showed manufacturing Capacity Utilization slipped to 76.4% in January, following a post-recession peak for December. Light vehicles sales totaled 16.6 million units-per-year in January, down by roughly 900,000 vehicles from December, the largest month-over-month decrease since April to May 2011.
The USMTO report includes new-order totals reported for six regions as well as the nationwide total. In the Northeast, January new orders for metal-cutting equipment totaled $78.12 million, down -22.2% from December but up 23.9% year-over-year (January 2018.) In the Southeast, new orders for metal-cutting equipment totaled $54.36 million, a 7.4% rise over December and a 49.3% year/year increase.
In the North Central-East, January manufacturing technology orders fell -14.4% from December to $86.24 million, still up 2.0% versus January 2018. In the North Central-West, January manufacturing technology orders slipped -1.4% to $72.36 million, which is a -9.6% decline versus January 2018.
In the South Central region, January new orders for metal-cutting equipment totaled $32.81 million, a 19.1% increase versus December, but a -32.4% drop from the January 2018 regional result. In the West region, January metal-cutting equipment new orders fell -28.7% from December and -3.1% from January 2018.
