February Orders Drop, but Positive Signs are Emerging
The U.S. Manufacturing Technology Orders report for February 2016 showed a five percent drop in orders compared to January and a 16 percent year-to-date decline compared 2015.
But AMT VP – Strategic Analytics Pat McGibbon says that slowing declines in orders suggest the industry slump is leveling off and that more positive indicators are beginning to emerge.
Orders were strong in the Southeast thanks to activity from the auto, aerospace and medical industries. Additionally, capital spending increased in the Southeast Central region for the first time in 18 months as a result of the increasing oil prices. Meanwhile, orders in the Northeast declined due to dismal weather conditions.
Another sign of upward movement is the early increase in the new housing market, which is usually noted in June and September. This early surge indicates near-future consumption of things like appliances and cars – excellent news for manufacturing technology companies regarding an uptick in demand. The U.S. Cutting Tool Institute also reported higher quotation activity indicating future increases in capital spending, and increased spending on cutting tools generally leads to increased spending on other capital machinery.
Looking to the Future
This spring may not be quite as weak as expected in regards to the market for capital equipment. Manufacturing technology orders are expected to remain weak through summer and then turn upward by September, just about the time IMTS – The International Manufacturing Technology Show 2016 opens. The end of 2016 should finish strong.
If you would like more insight into global forecasting, join AMT for the 2016 Spring Economic Update Webinar, April 28, 11:00 a.m. to 12:00 p.m.