ADVANCED MANUFACTURING NOW Patrick W. McGibbon
AMT —The Association for Manufacturing Technology
www.AMTonline.org
US Manufacturing: Inconsistency is the Word a I
n talking to hundreds of manufacturing technology providers this past month, including 650 marketing and sales people at the IMTS Exhibitor Workshop, the one consistent mes- sage was the inconsistency of the market. Industry sectors and regions have bounced from good to bad on a month-to-month basis. A region or sector will appear to be doing well when a drop in commodity prices brings cancellations or tax legislation will create a run on inventory. On average, expectations are that the market for manufac- turing technology orders will continue to slow through the end of the summer and pick up in the fall. Or, at least that is what Oxford Economics’ Greg Daco, Head of US Macroeconomics, shared with members of AMT at the end of January. He project- ed orders for 2016 will grow nearly 5% and even faster in 2017. He noted that these are projections for the national market and the sum of all customer sectors. Daco added that order trends in specifi c regions or industries are likely to vary greatly: The East Central region (WI, IL, OH, MI, IN)—This area has been hit hard by the drop in commodity prices for oil, steel, coal and other minerals. Komatsu’s profi ts have been falling. Joy Manufacturing and Caterpillar have laid-off hundreds of work- ers. It’s clear that miners don’t need new equipment to bring resources out of the earth at these prices. However, lower oil prices have been a boon to the automotive industry as con- sumers move to larger vehicles, disrupting production plans for effi cient cars. In this region, the gains outpaced the losses for the fi rst time across the four quarters. While the region lost over a thousand jobs over the past quarter in the off-road equipment and energy sectors, the auto industry announced investment plans for this region of $2.4 billion and more than 4000 jobs. This was the fi rst quarter in the past year that the East Central region didn’t end up in a negative position on these metrics. The Southwest area (TX, OK, LA, AR, NM)—Investments in capital equipment from the consumer electronics industry and commercial/residential construction equipment helped slow the hemorrhaging order rate associated with the energy industry. The investments by the electronics and construction equipment indus- tries around the Austin and Dallas areas stand in stark contrast to the near zero investments made by the oil and gas industry. Manufacturing technology sales people working in the oil belt have
12
AdvancedManufacturing.org | March 2016
said that the only thing tougher than their competitor’s discounts is competing against one-year-old pieces of their own equipment at auction houses as small shops struggle to stay in business. The West Central region (MN, IA, NE, KS, MO)—Declin- ing investment by the renewable energy, off-road equipment and energy sectors have been softened by growth in appliances equipment, consumer electronics and a very healthy aerospace industry. The Western region has also fared better than most thanks to increases in medical equipment; aerospace; federal programs that require research and development; investment in ports and defense equipment repair facilities. The two-year bud- get passed by the Congress has created confi dence in invest- ment among small manufacturers who supply these sectors.
With new materials, higher volumes and demand for trucks squeezing CAFÉ plans, the auto sector needs new manufacturing technology.
It should be pretty easy to determine from the narrative above which industries are buyers and which have hit the pause button. The auto sector is No. 1 among sectors needing new equip- ment—with new materials being introduced, greater volumes required and demand for trucks putting a squeeze on the CAFÉ quotas. In the past four months auto companies have announced 7522 new jobs will be created by investments of more than $3.8 billion dollars. The aerospace industry is No. 2 on the top markets list. It shouldn’t be a shocker as AMT estimates that the percent- age of orders placed for aerospace-related production equipment has jumped from 10 to 16% in the past year driven by backlog and new materials requiring new technology. Medical equipment producers’ investment in new equipment continues to grow but the investment is coming primarily from subcontractors for the major players rather than the major players themselves. Two cus- tomer sectors that are growing quickly are consumer electronics and fi rearms. Firearms manufacturers’ orders seem to be primarily coming in from the east but consumer electronics activity appears to be everywhere—St. Louis, St. Paul, Palo Alto, Austin, Boston, etc. While these sectors have consistently been the strongest in 2015 be cautious because inconsistency is the word.
Vice President, Strategic Analytics MODERN MANUFACTURING PROCESSES, SOLUTIONS & STRATEGIES
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126