Manufacturing technology orders for July were up 20 percent from July 2017, yielding a year-to-date total of $2.96 billion for 2018, up 22 percent from the same period in 2017. The latest U.S. Manufacturing Technology Orders Report from AMT – The Association for Manufacturing Technology showed orders totaled $399 million for the month, down a modest 3 percent compared to June totals, reflecting the start of the typical summer slowdown.
“The current growth rate in manufacturing technology orders is outstanding in the face of market uncertainty due to trade tensions,” AMT President Doug Woods said. “This unusual strength during the summer months reflects the market’s confidence in the continued growth in manufacturing, the need for additional capacity and the challenges in putting that into place in a timely manner due to strain on key component supply chains.”
Order patterns suggest technology consumers have come to realize that placing orders now is critical to meet the growing demands on their capacity as well as to having the equipment in place by year’s end for tax purposes. Many manufacturers, particularly small businesses, are just beginning to see how the tax reform bill will impact their bottom line and are scrambling to make investments that will leverage that to their advantage.
Year-over-year growth has been significant for all technologies but precision machines, such as EDMs, precision grinding, metrology and laser equipment, have experienced better than average growth during the past month. This is in addition to the strong showing that automation and newer technologies like additive and hybrid machines have posted throughout the past seven months relative to 2017.
As for where those orders are originating, industries known for their requirements for quality and precision machining saw double-digit growth during July. The mold & die shops and medical equipment industries’ investment increases were up by more than 25 percent in July while the aerospace industry’s orders for manufacturing technology in June were up by more than 20 percent.
On the power of those precision industries, the Northeast region saw orders grow over 20 percent month-to-month, a rare occurrence in the traditionally slow month of July. Orders in the North Central-East region also saw 11 percent growth mostly on significant orders from heavy machining industries like agriculture, automotive, HVAC, and job shops.
Most leading indicators that AMT tracks for trends in the manufacturing technology market took a dip in July. The Purchasing Managers’ Index fell below 60 percent but is still nearly a percentage point above the year-to-date low seen in April. Both consumer sentiment and auto sales fell slightly. Capacity utilization for manufacturing continues to edge upward, sitting at 76 percent in July, ever closer to the 80 percent that has historically signaled rapid acceleration for manufacturing technology orders.