U.S. machine shops and other manufacturers placed orders totaling $436.6 million for new machine tools during January – the second consecutive monthly decline in order value and overall units, as documented in the U.S. Manufacturing Technology Orders report. January new orders were -26.8% lower in value than the December figure, but still 33.2% higher than the result for January 2021.
AMT - the Association for Manufacturing Technology publishes the monthly U.S. Manufacturing Technology Orders report, compiling nationwide and regional data of new orders for metal-cutting and metal-forming and -fabricating machinery. The USMTO totals – presented in actual dollar values – serve as a forward-looking indicator of overall manufacturing activity, as machine shops and other manufacturers make capital investments in preparation for demand expected in the weeks and months ahead.
The January 2021 USMTO report marked the beginning of a fairly steady recovery in machine-tool new orders following the 2020 drop in manufacturing demand resulting from the Covid-19 pandemic. That rebound peaked in November 2021, but December 2021 and January 2022 results have shown double-digit percentage drops in new-order values, and successive declines in total units of 510 (December) and 824 (January.)"USMTO typically shows a drop in orders from December to January, and – after December 2021 proved to be the best month on record – we expected to see a substantial decrease," commented AMT president Douglas K. Woods. "Recording the best January on record is a welcome sign that the strength of the manufacturing technology market will continue into 2022.”
January new orders were paced by consumer demand across the manufacturing sector, according to AMT, with Woods noting that “recent demand for production capacity has shifted from sectors producing final consumer goods to ones closer to the raw material process."
He continued: "Consumer demand necessitated elevated capital investment, but we are now seeing a shift to industrial demand. This shift in industrial demand indicates that entire manufacturing supply chains are being brought back to the United States.
“Long-term, the broad industrial base created by concentrated supply chains is a huge positive for the manufacturing technology industry and the economy as a whole."
The USMTO report showed January new orders fell by double-digit percentages in each of the six regions tracked. However, the year-to-date results also showed growth in each region – ranging from the high year-over-year tall of +39.4% in the North Central-East region, to the comparatively modest +7.7% improvement in the South Central region.
"We have been highlighting issues that could take the wind out of the sails for the past several months, but the industry has overcome them in one way or another," Woods said. "Recent geopolitical events and sustained inflation are two more challenges, and time will tell if the industry can find a silver lining behind them."