Drop in January orders not unexpected; outlook remains positive for 2016

Drop in January orders not unexpected; outlook remains positive for 2016

Medical, automobile, and aerospace sectors are currently driving orders, while off-road construction; oil and gas; and agriculture sectors continue to struggle.

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March 16, 2016
Manufacturing Group
Economy/M&A

McLean, Virginia – The U.S. Manufacturing Technology Orders report (USMTO) for January 2016 showed that order values were down 30% from December, according to AMT – The Association For Manufacturing Technology. Year-over-year orders declined 21%.

“The drop in orders was not unexpected,” explained Douglas K. Woods, president, AMT. “January numbers are typically lower than December as companies that have financial years synced with the calendar year place delayed orders based on where they are relative to budget goals.

“This cycle will be less dramatic in 2017,” Woods added. “The temporary tax incentives which have spurred year-end buying decisions for more than a decade are now permanent or extended for several years.”

The medical, automobile, and aerospace sectors are currently driving orders, while the off-road construction; oil and gas; and agriculture sectors continue to struggle. As a result, the Southeast region is particularly strong when compared to other regions of the country, due to the significant presence of auto, aerospace, and medical companies in this region.

Although orders were down, January average unit values hit their highest level since January 2015 suggesting manufacturers are buying more sophisticated manufacturing technology to ramp up productivity rather that expand operations which would show a broader increase in orders and lower unit values.

“Despite today’s soft market, the mood from the 400+ manufacturing technology suppliers and buyers that attended the recent MFG meeting was upbeat, as were the forecasts,” said Woods. “Manufacturing leaders from

across the country gathered to gain insight into how technology can make their companies more productive, secure and flexible in an increasingly digital landscape. They are looking forward to 2016 finishing strong.”

Forecasts from The MFG Meeting, the joint annual meeting of members of AMT and the National Tooling and Machining Association, suggest that the U.S. economy is poised for growth along the lines of 2.5% to 3.5% driven by the consumer demand. Analysts speaking at the conference also expect China’s economy to rebound sooner than expected, and oil prices to reach $45 a barrel by year’s end.

AMT expects the overall market for manufacturing technology to remain weak well into the spring and summer months. Activity should slowly begin to turn around this fall. September’s IMTS – The International Manufacturing Technology Show 2016 is poised to deliver a significant boost in sales in the fourth quarter.

USMTO data is a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

About the United States Manufacturing Technology Orders (USMTO) report
These numbers and all data in this report are based on the totals of actual data reported by companies participating in the USMTO program. This report, compiled by AMT – The Association For Manufacturing Technology, provides regional and national U.S. orders data of domestic and imported machine tools and related equipment. Analysis of manufacturing technology orders provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

About AMT – The Association For Manufacturing Technology
AMT represents U.S.-based builders and distributors of manufacturing technology – the advanced machinery, devices, and digital equipment that U.S. manufacturing relies on to be productive, innovative, and competitive. Located in McLean, Virginia, near the nation’s capital, AMT acts as the industry’s voice to speed the pace of innovation, increase global competitiveness and develop manufacturing’s advanced workforce of tomorrow. With extensive expertise in industry data and intelligence, as well as a full complement of international business operations, AMT offers its members an unparalleled level of support. AMT also produces IMTS – The International Manufacturing Technology Show, the premier manufacturing technology event in North America.

IMTS – International Manufacturing Technology Show
The largest and longest running manufacturing technology trade show in the United States is held every other year at McCormick Place in Chicago, Illinois. IMTS 2016 will run Sept. 12-17. IMTS is ranked among the largest trade shows in the world. Recognized as one of the world’s preeminent stages for introducing and selling manufacturing equipment and technology, IMTS attracts more than 114,000 visitors from every level of industry and more than 112 countries. IMTS is owned and managed by AMT – The Association For Manufacturing Technology.

Source: AMT