August Orders Down 12.2% from Last Year
According to the latest U.S. Manufacturing Technology Orders Report published by AMT-The Association For Manufacturing Technology, new orders of manufacturing technology totaled $404.2 million in August 2023. This is a 16.1% increase from July 2023, but a 12.2% decrease from August 2022. Year-to-date orders reached $2.23 billion, 12.6% lower than the first eight months of 2022.
The report shows that the manufacturing technology industry is facing some challenges despite the strong demand for its products and services. The ongoing supply chain disruptions, labor shortages, and rising material costs have affected the ability of manufacturers to meet the orders and deliver on time.
Industry Trends Vary by Sector and Region
The report also reveals some interesting trends in different sectors and regions of the manufacturing technology industry. For example, job shops continued to order machinery below their typical monthly share, indicating that they are focusing on increasing capacity rather than expanding their product range. On the other hand, original equipment manufacturers (OEMs) increased their orders of specialized machinery to make more complex and higher-value parts.
Among the OEMs that increased their orders, manufacturers of automotive transmissions and power transmission technologies were particularly notable. The former recorded the highest three-month streak of orders since June to August 2017, while the latter experienced the largest sustained increase in orders since the summer of 2008.
The report also shows that the regional distribution of orders varied significantly. The Northeast region saw the largest increase in orders in August, up 56% from July and 9% from last year. The South Central region also performed well, with a 25% increase from July and a 4% increase from last year. However, the West region suffered a 29% decline in orders from July and a 40% decline from last year, while the North Central-East and North Central-West regions also saw double-digit decreases in both monthly and yearly comparisons.
Consumer Spending Key to Future Growth
The president of AMT, Douglas K. Woods, commented on the report and highlighted the importance of consumer spending for the future growth of the manufacturing technology industry. He said:
“Much of the spike in demand for manufacturing technology over the last few years can be traced back to elevated consumer demand. To gauge the probable path of manufacturing technology orders in the future, we should keep an eye on the health of consumer spending.”
He also pointed out some of the factors that could affect consumer spending in the coming months, such as mortgage payments, wages, inflation, and labor disputes. He added:
“Between mortgage payments becoming a larger share of discretionary income, wages in many industries not keeping pace with inflation, and ongoing labor disputes shuttering production lines, there are still several headwinds that face both consumers and the manufacturing technology industry.”
