U.S. Manufacturing Technology Orders totaled $448 million in May, which were nearly double that of May 2020, according to the U.S. Manufacturing Technology Orders report published Monday by AMT – The Association For Manufacturing Technology. May orders were up 11% when compared to April’s orders.
Total orders for 2021 topped $2 billion two months before that milestone was reached in 2020.
“Given the state of the economy last year, orders were expected to be up, but so far, 2021 is shaping up to be a historic year,” said Douglas K. Woods, president of AMT. “In only three other years since 1998 have orders surpassed $2 billion by May. Manufacturers across the industry have expressed broadly positive sentiment, so we would expect the remainder of the year not only to return to the pre-pandemic trend but also to exceed previous forecasts.
“Despite the general optimism felt across manufacturing sectors, one common impediment to growth is the inability to find sufficient labor. Manufacturing employment is still about half a million jobs below pre-pandemic levels, and the current number of open positions in the manufacturing industry is double the February 2020 level. Growth with fewer employees occurs regularly during manufacturing recessions, according to work done by the Brookings Institution. Studies have found that manufacturers in a position to do so will leverage a slowdown to invest in greater automation and more sophisticated production equipment. The result is a more productive in-place workforce, but continued growth is dependent on a larger, more skilled manufacturing labor pool.
Woods said metal valve manufacturers, whose products are used as components in nearly every part of manufacturing, increased orders by staggering margins in May, suggesting that U.S. manufacturers are shoring up supply chain risks by turning to domestic sources.
“Now, and during the recession, our members have reported that automation and new-tech sales continued to grow or barely saw a pause in order levels,” Woods said. “Without these investments, growth in recovery would have been more susceptible to supply chain disruptions. We have seen industries with modest domestic capacity increase investments in production capacity by multiples of pre-2020 levels.