Manufacturing technology orders posted an unexpected surge in August, climbing 28 percent over August 2017 and bringing the year-to-date growth rate to 23 percent for 2018.
The latest U.S. Manufacturing Technology Orders Report from AMT – The Association For Manufacturing Technology showed orders totaled $501 million for the month, up 26 percent from July and the largest August order level in the USMTO program’s history.
“Orders of a half-billion dollars in August were a major surprise, particularly as it occurred in the weeks immediately preceding the most successful IMTS ever produced,” said AMT President Douglas K. Woods. “The current acceleration in manufacturing is illustrated in the continued growth of backlog for durable goods. The only way to address that trend is to put more people and equipment in place. Therefore, there was no typical ‘summer pause’ usually associated with August, as manufacturers have a need to increase capacity now.”
Trade issues and supply chain delays are certain to have an impact on the equipment market headed into the fall. AMT supports a quick and fair conclusion to the issues with our trading partners as exports are important to all manufacturers, and in the case of our members, represent more than a third of their annual output.
The only region to show a month-over-month decline in August was the Northeast, where aerospace orders were off from both June and July. The North Central-West posted the most significant increase, up 80 percent, a result of consolidations in the medical equipment industry that boosted capital spending. That industry’s spending also benefited the North Central-East by offsetting declining orders from the construction and power generation equipment industries, yielding a modest 2 percent increase in August. The strongest customer industry in August was the job shop sector, which had the largest dollar volume growth and was 57 percent larger than in July.
The key indicators that AMT tracks relative to manufacturing technology orders continue to point to further expansion. The Purchasing Managers’ Index dipped in July only to jump to a new high in August, climbing past 61 and suggesting not only expansion but an acceleration in that growth rate. Durable goods orders were over $259 billion in August, the second largest monthly total since the series began in 1992. The durable goods order rate continues to outpace shipments, leading to a steady increase in unfilled orders. The continued growth in durable manufacturing capacity utilization is the result of these trends in orders, shipments and backlogs and point to the need for additional capacity to address the growth in demand for manufactured products.