In May 2023, new orders for manufacturing technology surpassed $365.9 million, marking an 8.6% increase over April. However, this figure fell short of May 2022 orders by 16.7%, as reported by the U.S. Manufacturing Technology Orders Report by AMT – The Association for Manufacturing Technology. Annual orders for 2023 totaled $2.1 billion, trailing behind the orders for the same period in 2022 by approximately 15%.
While job shops displayed a slightly accelerated pace of order growth, many major consumers of manufacturing technology witnessed a second consecutive month of decreased orders, counteracting the overall increase in May. Notably, the industry saw interesting shifts, particularly among smaller consumers, indicating evolving manufacturing practices influenced by government spending initiatives.
The electrical equipment manufacturing sector achieved its highest monthly order level in 2023, focusing on grid resilience to counter unusual weather patterns. Furthermore, the Grid Resilience and Innovation Partnership program, a component of the 2021 Bipartisan Infrastructure Act, is anticipated to drive additional investment in manufacturing technology within this sector, with approved projects set to be announced in the upcoming summer.
The construction industry also exhibited promising growth in manufacturing technology investment, with construction machinery manufacturers doubling their order volume compared to April 2023. The residential construction sector played a significant role in driving the need for capacity, as new housing starts experienced a substantial surge in May, and new permits have displayed an upward trend since the beginning of the year. Moreover, real construction spending on new manufacturing facilities has doubled since the end of 2021.
Despite positive economic indicators, such as an upward revision to Q1 GDP and continued employment strength, the manufacturing technology industry is showing signs of a slowdown. Federal Reserve Chair Jerome Powell’s remarks in June regarding elevated interest rates impacting manufacturers of durable goods, and significant consumers of manufacturing technology, suggest a potential downturn in the industry. It remains to be seen whether this situation mirrors the downturn in 2016, which avoided a broader recession, or aligns with the predictions of economists drawing parallels to the 2001 scenario.
As the manufacturing technology industry grapples with these challenges, ongoing data analysis will be pivotal in understanding the extent and nature of the economic situation and its implications for the industry’s future.
Reference: SME