Machine Technology Market Makes Steady Gains
At the recent IMTS Winter Economic Update webinar, AMT VP-Strategic Analytics Pat McGibbon presented AMT’s top 12 economic indicators and discussed the forecast for the manufacturing industry through 2019. (AMT – The Association For Manufacturing Technology owns and operates IMTS – The International Manufacturing Technology Show.)
Top Economic Indicators
With consumer sentiment at its highest since 2004 and capacity utilization continuing to move upward, demand for manufactured goods is expected to stay strong throughout the year. Pat identified manufacturing as the strong force leading the economy out of the recession, which has happened only twice: once after World War II and once in 2010.
The Purchasing Managers Index (PMI) from the Institute for Supply Management rose to 59.1 in January, the seventeenth consecutive month where the index has remained above 50, indicating expansion for manufacturing. New housing starts are close to 2006/2007 levels, which means six new appliances per new home. The Baltic Dry Index that measures the freight on water carriers, is building up capacity as international trade picks up. Inventory is beginning to tighten, which may cause supply-chain challenges and long lead times for delivery but should adjust by the end of 2018.
The aerospace industry is looking resurgent as new aircraft orders have been announced to go on top of a significant backlog, ramping up that industry’s supply chain after two years of contraction.
Notable investments in the automobile, off-road/agriculture/construction, energy/power, and medical/science/miscellaneous high-tech sectors were mentioned to illustrate potential opportunities in these industries. Pat also discussed the health, forecast, and details for each industry, including industrial production, capacity utilization, and estimated percentage of USMTO orders.
Are the new tax laws good for the industry?
The new tax law is a big victory for manufacturers, who have been fighting for meaningful tax reform for decades. The lower rates, together with expanded expensing provisions and a continued R&D tax credit, will increase business confidence and investment at a time when transformative technologies are rapidly changing the landscape for our industry.
The market for manufacturing technology orders is likely to remain strong through summer and should surge upward in September once IMTS — The International Manufacturing Technology Show 2018 opens. The end of 2018 should finish strong, higher than 2017, and hold steady into 2019. Registration and visitor housing is open. Register now!
Stay on top of the manufacturing technology forecast, attend Pat’s quarterly webinars. The next webinar, the IMTS Spring Economic Update, will be scheduled in May. Webinar dates and times are posted on http://www.imts.com/education/webinar.