Subscribe Button 1
SUBSCRIBE

Manufacturing Technology Orders Soften But Remain at Elevated Pace

Orders of manufacturing technology dipped slightly in May 2022 to $441.2 million, according to the latest U.S. Manufacturing Technology Orders Report published the Association For Manufacturing Technology (AMT). May orders were down 14% from April 2022 but nearly equal to May 2021 orders with a modest 1% decline. Year-to-date orders reached $2.42 billion, a 20% increase over 2021 orders through May.

“Order activity has begun to moderate, but given the slight decline from record heights, 2022 is shaping up to be one of the best years over the last two decades,” said Pat McGibbon, chief knowledge officer at AMT. “In any other year, numbers like we saw in May 2022 would be one of the high points, but after the run we’ve seen the previous 12 months, the monthly change is more of a return to normal than a dramatic pullback.”

Since May 2021, the average monthly units ordered and their values have been in the top 25% of the program’s entire history. “There have been modest signs of inflation beginning to take hold in prices for manufacturing technology, but the majority of the rise in average value over the last several months is primarily the result of increased automation as a percentage of the total order,” said McGibbon. “Difficulties filling vacancies over the past several months, concern over rising materials prices, and continued conflict in Europe have increased risk aversion among customers, leading to more cautious capital investment decisions.”

“The impact of the pandemic on supply chains led to the reinvestment in industries that were nearly shuttered by imports. Industries like the manufacture of mold and dies, fabricated metal products, screws, and hardware have made expanded capacity well beyond their pre-pandemic levels,” McGibbon continued: “In addition to securing supply chains from public health disruptions, there may be a renewed push to further reshore production, given the recent dangers to intellectual property outlined by the U.S. and U.K. intelligence agencies.”

Cutting Tool Consumption

May 2022 U.S. cutting tool consumption totaled $175.4 million, according to the U.S. Cutting Tool Institute (USCTI) and AMT. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was down 0.6% from April’s $176.5 million and up 9.1% when compared with the $160.7 million reported for May 2021. With a year-to-date total of $875.8 million, 2022 is also up 9.1% when compared to the same time period in 2021.

These numbers and all data in this report are based on the totals reported by the companies participating in the CTMR program. The totals here represent the majority of the U.S. market for cutting tools.

“The May numbers are very similar to April and seem to send the same message: that manufacturing continues to struggle with the issues of inflation, the supply chain disruptions, and the shortage of human resources,” commented Brad Lawton, chairman of AMT’s Cutting Tool Product Group. “Again, to sum it up with an overused word, ‘uncertainty’ will remain with us for an extended period of time.”

Pat McGibbon, AMT’s chief knowledge officer, has a more positive outlook on the industry, saying, “Leading indicators point to a bright finish for the cutting tool market this year after the sector’s seasonal softening in July and August. Manufacturing capacity utilization remains over 80%, and the Institute for Supply Management’s PMI index is at 53; both of which signal continued expansion in the manufacturing sector. Growing backlogs and delivery rates of manufacturing technology equipment will yield a significant expansion in manufacturing capacity. This surge in production capacity will support continued growth in cutting tool shipments through early 2023.”

For more information: www.amtonline.org

HOME PAGE LINK