U.S. machine shops and other manufacturers’ new orders for machine tools are exhibiting the effects of high interest rates, and economic uncertainty in general, according to the latest order summary reported by AMT – the Assn. of Manufacturing Technology. The U.S. Manufacturing Technology Orders report indicates that demand fell to $353.9 million during July 2023, -12.4% from June and -10.5% from the July 2022 report.
The monthly USMTO report tracks orders for metal cutting and metal forming/fabricating machinery as an index to future manufacturing activity, as machining operations anticipate their upcoming business needs. The report summarizes order values for the U.S. and six regions where
The July USMTO report brings the year-to-date order total to $2.83 billion, a -12.7% decrease over the seven-month total for 2022.“July is typically one of the slower months for manufacturing technology orders, so to be down slightly is not surprising,” according to AMT president Douglas K. Woods. “The more interesting trend is that for two consecutive months, the gap in year-to-date orders has narrowed over what have been historically slow months.”
Along with the order review, the USMTO offers six regional summaries of purchasing activity, which can be indicative of the strength of particular manufacturing market segments.
“Job shops have continued to decrease orders,” Woods detailed, “but other industries that have benefited from recent reshoring or government investment have been filling in the gap.”
AMT also noted stronger order activity by metal valve manufacturers (“…their third-highest monthly order value on record”, in July) and manufacturers of motor vehicle transmissions. Less impressive order totals were noted by manufacturers serving the aerospace sector.
Only two of the report’s regional summaries indicated increases in order values from June to July, in the Southeast (+28.8%) and North Central-West (+20.1%), while each of the other four regions delivered double-digit decreases in order values for the month, and all regions’ order values now trail their respective 2022 levels.
“Manufacturing technology orders have definitely begun to feel the effects of higher interest rates and economic uncertainty, but the build-up of domestic capacity means that there are more diverse sales opportunities than there have been in decades,” according to Woods. “That is what has kept manufacturing technology orders well above their historical levels despite the recent downward trend, and it will likely lead the industry out of any mild recession on the horizon.”