Manufacturing technology orders, which can serve as an economic indicator of manufacturing demand and stability, fell short of expectations in February.

February orders, which are measured by AMT — The Association For Manufacturing Technology, totaled $343.3 million, up 2.1% from January, and down 26.5% compared to the same time last year when order conditions were historically strong. Manufacturing technology orders in the first three months of 2023 averaged $455.6 million per month. In the remainder of the year, monthly orders only reached $395.9 million.

The largest consumer of manufacturing technology, contract machine shops, decreased orders, while manufacturers of engines, turbines and power transmission equipment increased orders to the highest level since February 2023. Orders from the latter sector have been elevated in recent years due partly to extreme weather requiring infrastructure improvements to improve grid reliability as well as government incentives around clean energy generation.

“March is the end of the fiscal year for several companies, so in most years, orders tend to increase,” AMT officials explained in a April 9 news release. “With an order value of $548.8 million in March 2023, it will be difficult to surpass if demand from contract machine shops continues to fall behind the overall market. Even if orders fall short of 2023 levels next month, there are positive signs the remainder of 2024 will provide some opportunities for growth.”

Why It Matters

The data collected by AMT for its U.S. Manufacturing Technology Orders Report provides regional and national U.S. orders data of domestic and imported machine tools and related equipment. Analysis of orders of manufacturing technology (the advanced machinery, devices and digital equipment used by U.S. manufacturing companies) provide a economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.