Manufacturing Tech Demand Increases Year-over-Year

January 10, 2012



Manufacturing Tech Demand Increases Year-over-Year


By Ilya Leybovich


Although orders for manufacturing technology decreased in every major U.S. region in November, demand for machine tools and related equipment remained above the prior-year level in most regional markets.

The total value of United States manufacturers' machine tool and related equipment consumption fell to $430.17 million in November, down 6.9 percent from October, according to the latest U.S. Manufacturing Technology Orders (USMTO) report. While the number of orders declined on a month-over-month basis, the November total remained 26.6 percent above the $339.68 million reported for November 2010.


With a year-to-date total of $4.96 billion, the value of machine tech orders in the first 11 months of 2011 was up 73.9 percent from the same period in 2010.

 Based on data from member companies of the American Machine Tool Distributors' Association (AMTDA) and the Association for Manufacturing Technology, the USMTO report provides national and regional consumption data for manufacturing technology.



On a month-over-month basis, machine tool and related equipment orders declined in all five of the major U.S. regions tracked by the USMTO.



The largest consumption decrease was in the Western states, where manufacturing tech orders fell 14.6 percent to $47.14 million in November. However, orders in the region remained 34.3 percent higher than the total for November 2010. Year-to-date, manufacturers in the Western region purchased $574.7 million worth of machine tools, 83.5 percent more than in the same period in 2010.



In the Central region, manufacturing tech orders declined 9.6 percent to $125.1 million in November, but were up 56.4 percent compared with the November 2010 total. At $1.35 billion, the year-to-date total was 81.9 percent above the level for the first 11 months of 2010.



In the Midwest, manufacturing tech orders fell 5 percent in November, down to a total of $141.29 million for the month, but remained 22.1 percent above the total for November 2010. In the first 11 months of 2011, Midwestern manufacturing tech consumption reached $1.66 billion, 94 percent higher than in the same period the prior year.

 In the Southern states, manufacturing tech consumption dropped 4 percent to $51.77 million in November, but was 17.3 percent higher than the total for the same month in 2010. The year-to-date total of $619.34 million was 55.5 percent above the total for the comparable prior-year period.



In the Northeast, machine tool orders were down 1.8 percent from October, falling to a total of $64.88 million in November. Consumption was also 1.4 percent lower than in November 2010, but the year-to-date total of $743.95 million stood 38.9 percent higher than the total for the same period in 2010.



"Manufacturing technology orders slowed slightly in November, but maintained their sprint toward the 2011 finish line thanks to the bonus depreciation tax incentive," AMTDA President Peter Borden said. "The order slowdown in metal cutting equipment was countered by acceleration in the fabricating sector and contributed to an increase over 2010 of nearly 75 percent. Backlogs for 2012 are very healthy at this point and growing longer."



According to the latest data from the U.S. Department of Commerce, new machinery orders increased 0.4 percent in November to a total of $31.8 billion. While industrial machinery orders rose 11.7 percent to $3.1 billion, construction machinery orders plunged 8.1 percent down to $4.4 billion. For the first 11 months of 2011, overall machinery orders were valued at $344.6 billion, 14.3 percent more than in the same period in 2010.


Meanwhile, machinery shipments increased 0.6 percent in November, reaching $30.5 billion. Year-to-date machinery shipments climbed to $321.6 billion in November, a 12.5 percent rise over the same period in 2010.


"The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time. This is something that's never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S.," AMT President Douglas K. Woods said in a recent forecast for 2012. "American manufacturers rushed to beat the end-of-year bonus depreciation deadline. Inventories were low — something we've never experienced going into a recession — and that accounts for the quick rebound."