Although orders for metalworking equipment for the factory floor, one of the most closely watched economic indicators in the industrial market, are showing some short-term weakness when compared to 2014’s stellar performance in this business segment, some economists who track and analyze sales data for this equipment expect the market to improve in 2016.
According to the latest United States Manufacturing Technology Orders (USMTO) report recently published by the Association for Manufacturing Technology (AMT), McLean, Va., Sept. 2015 U.S. manufacturing technology orders saw a monthly gain of 10.9% from August, but overall stand at 16.6% down for the first three quarters of 2015 compared to the previous year.
September U.S. manufacturing technology orders totaled $321.77 million. This total was up from August’s $290.25 million and down 49.6% when compared with the $638.82 million reported for September 2014. The year-to-date total for 2015 stands at $3,105.57 million, a 16.6% decline from the $3,722.27 million reported at this time in 2014.
This monthly data can be quite volatile with wild monthly swings, and Douglas Woods, AMT’s president, said in the press release, “Considering the growth in orders we have seen over the past two years, this decline is not as bad as it sounds. It’s important to remember that 2014 was a top-performing year and that some leveling off to minor pull-backs are expected.
“Our forecasters predict this market softness will last at least through the first quarter of 2016, but it could turn around sooner rather than later. Right now, economic indicators are favorable and several of our members’ key customer segments are strong. Autos, medical equipment and aerospace are all doing exceptionally well. That should help boost capital investment,” Woods said. “Overall, we are looking positively at 2016.”
The AMT release said, “Energy costs, a stronger dollar, and weakness in the global economy are having an impact on capital investment, but there are several factors working in favor of manufacturing. October marked the 77th consecutive month of a manufacturing expansion, according to the Institute for Supply Management; the trade deficit narrowed in September to its lowest level in seven months; and the two-year budget deal just signed by President Obama averts the possibility of a government shutdown and default through the 2016 elections, injecting some level of certainty into the business environment.
The Association for Manufacturing Technology says its data is a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.