AMT: Orders for Manufacturing Technology Surge
May 9, 2022
Monthly
orders of manufacturing technology surpassed half a billion dollars for
the first time in 2022, totaling $552.3 million in March, according to
the latest U.S. Manufacturing Technology Orders Report published by AMT
– The Association For Manufacturing Technology. March 2022 orders were
15.2% higher than February 2022 orders and 20.4% higher than March 2021.
The first quarter of 2022 had orders totaling $1.47 billion, 26.5%
higher than the first quarter of 2021 and the highest Q1 of any year
since 1998.
“The first quarter of 2022 has been extremely impressive for
manufacturing technology orders,” said Pat McGibbon, Chief Knowledge
Officer at AMT. “Previous forecasts had predicted a strong beginning to
2022 and a soft summer which would rebound by IMTS in September, as
summer orders are often delayed in anticipation of new products being
exhibited at IMTS. However, inflation, the war, and saber-rattling in
the east are creating a level of uncertainty and risk that businesses
must consider. Despite these challenges, we see the manufacturing sector
continuing to invest in additional capacity.”
According to the ISM® Report On Business® – Manufacturing (PMI®), the
manufacturing sector grew in March but at a slower rate than in previous
months. Growing backlogs at all levels of the manufacturing sector have
been expanding in the last several months. "The rebound of demand for
manufactured goods overwhelmed supply chains and created a backlog of
orders," said McGibbon. "This backlog is now propping up a floor on the
demand for manufacturing technology. As consumer demand varies from
month to month, tackling these backlogs necessitate additional machinery
capacity."
Despite
the near-record orders for manufacturing technology, the first quarter
of 2022 had the first negative GDP growth since the onset of COVID. The
contraction was primarily due to a widening trade imbalance that masks
the underlying strength of the consumer. “To have one of the best
quarters in manufacturing technology orders and then find out GDP was
contracting over the same time almost defies logic,” said McGibbon.
“However, there have been many instances over the past several months
where orders have been up, despite some headwind that would have been a
major issue for the industry prior to COVID.”
Economists had predicted consumer demand would soon shift back to
services, but this shift has been happening at a slower rate than
anticipated. McGibbon said, “Supply-side issues continue to conceal the
true potential of consumer demand for manufactured goods, where
expenditures have been slipping the past few months. While these issues
result in shortages for industries that manufacture final consumer
goods, manufacturers of components farther from the consumer are
amassing backlogs. Assuming demand for the final good persists despite
growing delivery times and rising prices, these growing backlogs for
components could fuel demand for manufacturing technology well into the
summer months.”
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The United States Manufacturing Technology Orders (USMTO) Report is
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. |