Recently, a report compiled and released by the Association for Manufacturing Technology (AMT) managed to fuel the flames of concern about a struggling manufacturing sector by way of releasing their latest collection of data noting a decline in technology orders.
As noted, this has left some in the industry a bit concerned about the potential issues that might arise should this recorded decline get out of hand.
Today, we’re here to relay the facts to you as described by the AMT and then tell you why this collection of disheartening data could actually be better news for the industry than you think.
The Association for Manufacturing Technology (AMT), represents U.S. based providers of manufacturing technology (the advanced machinery, devices, and digital equipment that U.S. manufacturing relies on to be productive, innovative, and competitive.)
Located in McLean, Virginia, near the nation’s capital, AMT acts as the industry’s voice to speed the pace of innovation, increase global competitiveness, and develop manufacturing’s advanced workforce of tomorrow.
With extensive expertise in industry data and intelligence, as well as a full complement of international business operations, AMT offers its members an unparalleled level of support, and is also the producer of the International Manufacturing Technology Show (IMTS), the premier manufacturing technology event in North America.
On a monthly basis, AMT, with the participation of its combined industry resources, collects data on the demand for manufacturing technology in the United States, Mexico, and Canada, which is then compiled analyzed and released the second Monday of every month in their United States Manufacturing Technology Orders (USMTO) press release.
Who are these “combined industry resources”?
This refers to the long list of companies who manufacture or sell any AMT products who, as such, have the ability to track demand and calculate their market share by geographic area, technology, and customer industry in exchange for contributing their monthly order information to AMT for analysis.
On a positive note, further discussing potential government steps to counterbalance such declines across the industry, Woods did note FED chair Jerome Powell’s recent comments during a June 2023 press conference where Powell mentioned that manufacturers of durable goods – the consumers of manufacturing technology – would likely feel the effects of elevated interest rates before the broader economy. Woods also stated that, however, that, despite positive economic news, “… such as the upward revision to Q1 GDP two weeks ago and continued employment strength, the manufacturing technology industry is showing signs of a slowdown.”
Though the industry has seen a considerable resurgence over the past several months, with new manufacturing technology orders totaling around $365.9 million in May of 2023, the most recent USMTO report relayed its findings that new manufacturing technology orders saw an increase of 8.6% in May 2023 when compared to the previous month, but still fell short by 16.7% when compared to the numbers seen in May of 2022.
In addition, annual orders for 2023 did increase to $2.1 billion, but continue to lag nearly 15% behind orders from the same period in 2022.
Reflecting on the findings, AMT president Douglas K. Woods had this to say:
“May orders increased but not enough to make up for the record decline we saw in April. Job shops increased orders at a slightly faster pace than the general market, but many large consumers of manufacturing technology decreased orders for the second month in a row. Significant growth from typically smaller consumers of manufacturing technology highlights some interesting changes in how and where goods are manufactured, particularly in anticipation of government spending programs.”
On a positive note, further discussing potential government steps to counterbalance such declines across the industry, Woods did note FED chair Jerome Powell’s recent comments during a June 2023 press conference where Powell mentioned that manufacturers of durable goods – the consumers of manufacturing technology – would likely feel the effects of elevated interest rates before the broader economy. Woods also stated that, however, that, despite positive economic news, “… such as the upward revision to Q1 GDP two weeks ago and continued employment strength, the manufacturing technology industry is showing signs of a slowdown.”
After reading the above, surely you can understand why someone might begin to wonder whether or not the future of the manufacturing technologies industry is as bright as some had hoped.
Well, don’t worry… We’re here to tell you it is.
As anyone who has even the most basic understanding of business and the stock market will tell you, times of fluctuation are completely normal.
As with life, some days are good, and some days are bad. But just because you had a bad day doesn’t mean you give up on life! No… You power through your struggles and await the better days ahead.
The same is true in business and economics. In this particular case, the noted decline in manufacturing technology spending by AMT should merely be looked at as a natural fluctuation in the course of growth being seen in the overall sector.
Lets take a look at some of the very statistics found by AMT to help support our argument…
AMT reports a decrease in manufacturing technology orders of 16.7% from May 2022 to May 2023, with an average annual decline of 15% overall.
While this may be true, it should also be noted that U.S. manufacturing is currently in the middle of a national resurgence thanks, in part, to the Trump and Biden administration’s efforts to fund and reshore the industry.
In fact, thanks to recent orders from manufacturers of electrical equipment bringing monthly highs in 2023, the industry is on pace to make the second largest investment in manufacturing technology since 2018!
In addition, the Grid Resilience and Innovation Partnership (GRIP) program, which is part of the 2021 Bipartisan Infrastructure Act, is expected to send notification of approved projects by the summer of 2023, which could very well spur more investment in manufacturing technology from this industry alone.
… And even still, the continued growth and support of the U.S. manufacturing sector in general over the past few months has produced some great things for those of us in the industry and, as this is just the beginning, will more than likely have more to give sooner rather than later.
As you can see, this is a time of excitement in the industry, not concern.
There are big things happening in U.S. manufacturing and NOW – before the results begin to show – is the time to get involved!
Fluctuations in sector health, as with anything of organic growth, are to be expected. Don’t let a moment of relapse make you give up on the entire dream.
As any good stockbroker will tell you, some of the best opportunities arise when things look to be at their worst. It’s in times such as these that further investments are considered, and fortunes are made!
If you haven’t already, take a look at what an investment in Industry 4.0 could do for you and your business and maybe you could be one of us reaping the benefits in the days ahead.
P.S. If you’d like to learn more about Industry 4.0 or any steps you could take in the near future to help secure your place in the manufacturing sector, then Rain Engineering wants to hear from you.
Our team’s years of combined experience in the manufacturing and automation sector is just what you need to prepare you and your team for the profitable days ahead.