Manufacturing technology orders tallied a value of $413.7 million in March, a 26 percent increase over February but a 20 percent decline over an exceptional March 2018, according to the latest U.S. Manufacturing Technology Orders Report published by AMT – The Association for Manufacturing.
The first three months of 2019 saw total orders at $1.13 billion, a 9.5 percent decline over the same timeframe in 2018. These numbers suggest the market is still strong, but growth is beginning to slow.
“The 2019 market for manufacturing technology will contract from 2018 but will still likely be one of the best years since the Great Recession,” said Pat McGibbon, AMT Chief Knowledge Officer. “Growth expectations in key geographic markets like China, Europe and a continued rapid expansion in India could lead to any downturn being one of the shortest on record for the manufacturing technology sector.”
Most major industries saw double-digit increases over February. Automotive was one exception, with a slight decline after robust February orders in motor vehicle manufacturing. At the same time the automotive sector saw slight declines, the engine and turbine industry more than doubled orders from February. Government and defense orders took the lead on gains after a slow order pace in the first two months of 2019. Job shop orders were up nearly 15 percent.
The Southeast region took the lead in monthly gains, with strong growth coming from specialty tool and die, metal valve manufacturing, and engine and turbine industries. The West was the only region to experience a decline in orders from February. A 10 percent decline in metal cutting machines was blunted by a doubling of orders for forming and fabricating machines over the previous month.
Capacity utilization continued its decline into March but at a slower rate, settling at 76.87 percent. Light vehicle sales declined to 16.425 million in April from 17.477 million in March which was the highest total so far this year. April consumer sentiment registered 97.2 percent, which the University of Michigan notes is equal to the 28-month average of the index. The April 2019 Manufacturing ISM Report on Business had a PMI of 52.8 percent, a decline of 2.5 percentage points from March, but the 32nd consecutive month of growth.
A protracted trade war with China is the wild card, and uncertainty surrounding our trade policy hampers growth. President Donald Trump frustrated by the pace of the negotiations announced increases to existing 301 tariffs last week and threatened to expand them to include all imports from China.
This would create major hardship on U.S manufacturers who are struggling not to pass the cost onto consumers.
“Tariffs run counter to our global competitiveness as they negatively impact not only the offending country but also U.S. companies and their customers,” said McGibbon. “AMT members are working hard to mitigate increased costs and minimize risks to revenue while providing the leading-edge technology that will foster productivity growth.”