Manufacturing Technology Demand Strong in 2011

U.S. manufacturing technology orders in 2011 were $463.32 million as of October figures, which is up 80.5% compared with 2010 and is the second-highest dollar amount in the last 15 years.

“It’s long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity. Manufacturing technology provides a foundation for all other manufacturing,” said Douglas K. Woods, President of AMT – The Association For Manufacturing Technology. “These machines and devices are the equipment that turn raw materials such as steel, iron, plastic, ceramics, composites, and alloys from their original state as stock materials into what will become durable goods such as airplanes, cars, and appliances, as well as consumer and other goods that are used every day.”

The Midwest and Central regions of the U.S. have seen the greatest surge in manufacturing technology orders. The Midwest’s manufacturing technology orders in 2011 are 105 percent more than the comparable figure for 2010. This large increase is the result of the region’s large traditional customer base.

It is also where the oldest equipment resides and the industries impacted most by the weak dollar and reshoring trend are located. The Central region pick-up — 85 percent higher compared to 2010 — was powered by the growth in the energy business and secondly by the automotive industry.

Beyond manufacturing technology, overall U.S. manufacturing is robust. Despite the past several years trend of offshoring, the value of U.S. manufacturing output increased by one-third to $1.65 trillion between 1972 and the 2008 recession. Even though China accounted for 19.8 percent of global manufacturing value in 2010, the U.S. was strong with a share of 19.4 percent.

“The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time. This is something that’s never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S.,” Woods noted.

“American manufacturers rushed to beat the end-of-year bonus depreciation deadline. Inventories were low – something we’ve never experienced going into a recession – and that accounts for the quick rebound,” he explained. Exports are rising as American manufacturers meet overseas demand. Manufacturing technology from the U.S. is less expensive than foreign equipment, and U.S.-made goods are more price competitive than many imports due to the weak dollar.

The average age of machinery currently in use at U.S. manufacturing facilities crept up from nine years in 2007 to 13.5 years, and as demand started to increase the need for investment to replace the aging equipment became apparent. Those investments are being made in completely new technology. Multi-operation machines are profoundly impacting productivity. Water jet cutting and hydroforming are experiencing massive growth because they offer all the benefits of traditional processes but eliminate distortion and deformation. Additive manufacturing is growing, nano machining has become commercially affordable, and the availability of new materials, such as compact powdered metals, is having a tremendous impact. Plus, the emergence of cloud manufacturing, which promotes collaborative efforts across organizations, is opening new doors to manufacturers.

Related content: 3% Growth Possible in 2012 If Key Issues Addressed ‘Coherently,’ Economist Says
TAGS: Archive
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish