U.S. Manufacturing Technology Order Report – December 2018 Data

U.S, manufacturing technology orders posted $443 million in December, down two percent from November and six percent from December 2017. The year end order total for 2018 was $5.5 billion, up 19 percent from the annual sum for 2017. The November to December drop was only the fourth time in the program’s 23-year history that a year didn’t end with an uptick in orders from November.

“We finished a fantastic run up in manufacturing technology orders during 2018, with most analysts looking for good growth in units and modest growth in revenue in 2019,” said AMT President Doug Woods. “While our market looks healthy now, there are concerns that trade issues and slower manufacturing technology markets abroad will create headwinds in the U.S. later in the year.”
December orders fell by a modest amount which negatively impacted most industries. Aerospace and Engines and Turbines placed a third or more orders than in November. The Forging and
Stamping industry had a very good second half of 2018 posting month-on-month increases in orders for the last three months. Surprisingly, Government and Defense orders were also up in
December, perhaps in anticipation of a prolonged government shutdown evenly spread across almost all industrial sectors.

Geographically, the Northeast and West were the strongest markets in December, each posting single-digit gains over November levels. Aerospace and Engines and Turbines held up market
levels in what would have been a lackluster month for the Northeast region otherwise. The West held on to a gain in December thanks to the Auto and Stamping and Forging industries. The
North central East continues to generate the most orders, but its share has dropped significantly in the past three years. The North central West is the second largest region by dollar volume
followed by the Northeast.

Most of the key indicators for manufacturing were not available for December due to the government shutdown. Those that were available point to continued growth, but at a slower pace in 2019. The ISM Purchasing Managers’ Index was up 2.3 points to 56.6 in January indicating continued expansion in the manufacturing sector. Light vehicle sales were at about a 17 million
annual rate as we started 2019, and the Bureau of Labor Statistics published an astounding 304,000 newly-employed in January. The figure was nearly twice as large as was expected.

Industry executives continue to be concerned about the trade war with China. While all agree that something needs to be done to eliminate the theft of IP and leveraging U.S. corporations for investment dollars and trade secrets for access to China’s enormous market, the question is whether the current strategy is doing more harm to U.S. businesses than Chinese companies. The
outlook for the manufacturing technology market remains positive as analysts’ preliminary outlooks suggest a five to 10 percent growth in orders during 2019.