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U.S. Manufacturing Technology Orders Down 31% YTD, 45% in May Y/Y

July 20, 2020, 07:15 AM
Filed Under: Manufacturing

U.S. manufacturing technology orders decreased 5 percent in May from the previous month to $219.4 million, according to the latest U.S. Manufacturing Technology Orders report published by AMT – The Association For Manufacturing Technology. New orders were 45 percent lower than in May 2019, and total orders through May 2020 were $1.3 billion, 31 percent lower than YTD 2019 orders. 

“We had predicted that growth in the MT sector would be flat in the first half of 2020; however, it is down about 30 percent due to the impact of the pandemic on the global manufacturing industry,” said Douglas K. Woods, president of AMT. “While the aerospace, defense, housing and infrastructure sectors did better in May, growth has been uneven across industries. The automobile sector is down and spending on medical supplies has leveled off. Significantly, very high business and consumer savings rates indicate a lack of confidence in the economy, and industry economic forecasters predict the manufacturing industry will be down about 50 percent before it begins to rebound in the last quarter of this year or in early 2021.  

“Employment figures are the positive news. Layoffs in the manufacturing sector have gone down to their pre-pandemic levels, and there have been two consecutive months of national gains in employment. These gains likely trickle down into the economy in the form of increased income, greater consumer confidence and increased spending, and lead to a return to more normal spending cycles.” 

“2020 will still be a down year for MT orders, and we think it is likely that manufacturing will experience uneven growth for the next several quarters. Oxford Economics has forecast a 50 percent decline in machine tool orders in 2020 (from 2019), and while they have also forecast a robust 84-plus percent increase in MT orders in 2021, this is still a 10 percent decline from where the industry stood before the pandemic. Consumer confidence, capacity utilization, and the unemployment rate are the key indicators that we will keep our eyes on as they chart future performance.” 

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