Capex Activity Driving Machine Tool Demand

U.S. machine shops’ and other manufacturers’ orders for new metalworking machinery increased 40.3% from February to March, up to $681.3 million for the month. The total represented a 31.5% rise in order values from March 2025, and the January-March order total of $1.61 billion is a 27.8% increase in order values versus Q1 2025.

“Economic output in the first quarter of 2026 showed a resilient consumer and a strong appetite from businesses for capital investment,” according to AMT - the Assn. for Manufacturing Technology. “As quotations are converted to orders and manufacturers’ backlogs continue to grow, there is a strong potential for an upside surprise in the remainder of 2026.”

AMT reported the purchasing activity in its latest U.S. Manufacturing Technology Order report, a monthly summary of demand for metal-cutting and metal-forming machinery based on new-order value and machine units, nationwide and in six regions. The USMTO report serves as an index to future manufacturing activity, as machining operations invest in capacity to support their anticipated production activity.

The report pointed to “resilient consumer demand” as the incentive drawing manufacturers to resist the uncertain conditions resulting from “shifting” tariff policies through 2025 and into the start of the current year. “That rally in metalworking machinery demand carried into the first quarter of 2026 with little deterrence from the escalating geopolitical uncertainty caused by the outbreak of war with Iran in the closing days of February 2026,” according to AMT’s account of economic conditions surrounding the USMTO report.

The steady rise in new order values indicates the effects of inflation but also a growing demand for automation in manufacturing technology (the latter being a consequence of a persistent shortage of skilled labor.) This “sustained increase in average order value above inflation” has been evident in monthly USMTO reports throughout the past year.

For example, AMT offered the contract machine shops, the largest buying segment for manufacturing technology. These “job shops” should reflect the overall rise in order values, but they continue to underperform as they have done during the past year - though AMT noted their order totals increased at a slower pace during March.

Aerospace manufacturers orders decreased by roughly -12% from February, and still remain strong as commercial aerospace demand builds and military contracting activity increases.

AMT noted that manufacturers of “engines, turbines, and other power transmission systems more than doubled” their manufacturing technology orders from the February period. “Increased demand for electrical power needed for data centers will likely spur additional investment from this sector in the coming months,” it observed.

Regional USMTO results for March were strongest for the West, with a total of $195.6 million new orders recorded, up 41.5% from February and up 92.9% from March 2025. Each of the six regions tracked showed positive activity during March, with notable demand in the Northeast ($120.5 million, +89.4% from February) and North Central-West ($103.5 million, +35.1.)

For the first quarter of 2026, the USMTO report shows machine tool demand growth is evident across all regions and strongest in the West ($448.2 million YTD, +68.5%.)