Although orders of manufacturing technology have continued their downward trend since peaking in the second half of 2021, they remain above historical averages. PHOTO courtesy REGO-FIX.
New orders of manufacturing technology totaled $411.3 million in June 2023, according to the latest U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology.
June 2023 orders increased 12.6% over May 2023 but fell 1.7% below orders in June 2022. This brings total orders through the first half of 2023 to nearly $2.5 billion, about 13% below the total for the first half of 2022.
“Orders of manufacturing technology have continued their downward trend since peaking in the second half of 2021; however, for perspective, they remain above historical averages,” said Douglas K. Woods, president of AMT. “Even in non-IMTS years, the majority of orders tend to come in the second half of the year. Despite some headwinds, including fears of a recession, it would seem reasonable that manufacturing technology orders could outperform some of the more pessimistic expectations if we return to that historical trend.”
Job shops, the largest customer segment, only increased spending by 4.2%, well under the industry growth of 12.6% from May to June 2023. They also decreased the number of units ordered, while the industry remained about flat.
“Job shops tend to be smaller to medium-sized businesses, and the effects of economic uncertainty, coupled with higher interest rates, have begun to take a toll, causing some to delay capital investments,” said Woods.
There was one surprising bright spot despite high interest rates and the ever-looming fear of a coming recession: Manufacturers of automotive transmissions have been noticeably increasing investment in manufacturing technology.
“Investments on this scale show how manufacturers are preparing for a prolonged transitional period from internal combustion engines to electric vehicles,” said Woods. “Moving toward electrification means facing numerous supply and logistical hurdles, from the sourcing of elements to grid reliability. Auto manufacturers recognize that until these challenges are overcome, demand for internal combustion engines will justify further investment.”
Year-to-date orders for manufacturing technology from the automotive transmission and powertrain parts manufacturing sector are at the second-highest level since the first half of 2015.