US manufacturing technology orders from 1999 through 2015 Association for Manufacturing Technology

US Manufacturing Technology Orders Drop for July

Total orders drop 11.8% from June and 11.1% from July 2014, though industry analysts anticipated the down year after a strong 2014.

Domestic manufacturing technology orders dropped in July, which has manufacturers in a cautious holding pattern, according to the newest report from the Association for Manufacturing Technology.

The United States Manufacturing Technology Orders (USMTO) report, which totals data from companies participating in the program, indicates that American manufacturing technology orders totaled $318.33 million for July, down 11.8% from the $361.03 million reported for June, and down 11.1% from the $358.11 million reported for July 2014.

Total orders for 2015 check in at $2.483 billion, down 8.7% when compared to this time last year.

“The mood among manufacturers right now is best described as ‘caution cubed,’” AMT president Douglas K. Woods said, referring to “concerns around disruption in China, a drop in some key economic indicators like PMI and housing starts, and a softening in large customer industries including agriculture and energy.”

The various situations across the Atlantic Ocean — including the Greek bailouts and now the Syrian refugee influx to Germany and other western European countries — have also provided uncertainty and dropped consumer confidence, Woods said.

“Given all of that,” he said, “it’s no surprise that manufacturers are wary about making large investments in capital equipment.”

National orders spiked last fall, jumping from $362.65 million and 2,139 units in August 2014 to $638.81 million and 3,462 units in September 2014. The 12-month averages ending in July are $399.49 million and 2,270 units.

“This is not something that’s unexpected,” said Pat McGibbon, vice president of strategic analytics at AMT. “If you look at the June-July change over the last 10 years, which included two recoveries, you’ve got an average of negative-8%. You’ve got a drop of 12% this year, … which is in line with what we were predicting” last year.

McGibbon said he predicted in 2014 that the industry would finish this year down about 5 to 10%. “As we look into 2016,” he said, “we’re looking at some strength beginning to appear in the latter part of the summer and through the fall.”

Metal cutting, metal forming and fabricating is performing well in the south and west, though its overall performance is still in line with the rest of the report. McGibbon also noted that the auto industry is helping support the cutting tool industry and that the aerospace industry is still working off a four-month backlog.

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