The U.S. Manufacturing Technology Orders (USMTO) Report, published by AMT – The Association For Manufacturing Technology, indicated that manufacturing technology orders reached $317.9 million in April 2024. This figure represents a 25.6% decline from March 2024 but is only 5.4% lower than orders in April 2023. Cumulative orders for 2024 totaled $1.43 billion through April, marking a 16.2% decrease compared to the same period in 2023.
Since peaking in the fourth quarter of 2021, machinery orders have shown a steady decline, according to USMTO data. Although 2024 had the weakest start to the year since 2020, the orders through April were nearly 5% above the average order volume for the first four months since USMTO began tracking in 1998.
Contract machine shops, the primary customers of manufacturing technology, experienced a significant decrease in orders in April compared to March 2024, although their decline was less severe than the overall market. Despite this, contract machine shops saw their slowest start to the year since early 2020, when COVID-19 shutdowns severely impacted orders.
The automotive industry, after two years of robust orders, has begun reducing its investment in manufacturing technology. This reduction is partly due to lower-than-expected consumer demand for electric vehicles and the ongoing lag in demand for internal combustion engines, influenced by persistent inflation and high interest rates affecting consumers’ ability to purchase and finance new vehicles.
Conversely, the aerospace industry has maintained a high level of investment into 2024, particularly in the Southeast region of the United States. This region has seen the strongest growth, driven by a skilled workforce and the expansion of manufacturing operations, especially in North Carolina.
Despite the current decline, the longer-term trend suggests stabilization. During AMT’s Spring Economic Webinar, Oxford Economics revised their forecast, predicting that 2024 will end flat or slightly down compared to 2023, with an anticipated increase in order activity for the remainder of the year.
New orders for durable goods remained nearly flat through April 2024 compared to the start of 2023, while industrial production fell 7.6% from its post-COVID peak. Oxford Economics forecasts that industrial production has likely hit its lowest point of the current business cycle in most advanced economies.
Historically, orders in the second half of the year surpass those in the first half by nearly 10%. If industrial production and new orders increase as predicted, manufacturers may require additional capacity around the time IMTS 2024 opens in Chicago.
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