U.S. manufacturing technology orders fell 1% from the previous month to a total of $361.5 million in September 2019 according to the latest U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology. Orders decreased 41% from September 2018, yielding a 10% decline in the first three quarters of 2019.
Aerospace orders were flat, machine shops were down modestly, and the automotive sector saw a slight increase despite a decrease in orders in the transmission and powertrain sector.
“Manufacturing technology orders were lower in September than in August, which has only happened twice since USMTO started tracking data,” said Douglas K. Woods, president of AMT. “The automotive and aerospace sectors were higher, however, possibly due to companies looking to buy capital equipment and complete installation by year-end to take advantage of tax incentives. It could also be an indication that there was a bump of optimism in August around the GM and labor union talks and progress on trade issues.
“Contract machining, which typically represent about 30% of all manufacturing orders, totaled about 40% over the last five months. However, in September, orders fell to 35%. This is likely due to customers reducing their reliance on contract machining and increasing capital investments in their own plants.
“Spending in the auto industry was up by about 10% despite a significant decline in orders by the power transmission segment of the industry. This is indicative of a supply chain that felt confident that the GM strike would be short and that NAFTA 2.0 would be resolved favorably, again, coupled with the desire to get in orders before the end of the tax year. The supply chain in the automotive sector was feeling comfortable making modest investments to gear up for 2020. In addition to USMTO data, another key data point that supports this is that the industry saw the projection for the annual sales of vehicles go back up to over 17 million units in October. There is clearly optimism that things will be better by end of year.
“The aerospace industry has been a stalwart in this downturn since the beginning of 2019. Spending in September was up modestly from August, and this is significant because it was achieved by broad investment across many companies, whereas August orders were based on only a few significant orders.”