Manufacturing orders down almost 20% in January
January manufacturing orders dropped almost 20% from the same period in 2022, but general industry growth is still expected in 2023.
- New orders in January 2023 dropped by almost 20% compared to the same period in 2022, but the overall volume is still above what would be expected at this time of year.
- There is general optimism about the state of the manufacturing industry with construction and machining, in particular, to remain strong in 2023.
New orders of manufacturing technology totaled $355.6 million in January 2023, according to the U.S. Manufacturing Technology Orders Report published by The Association For Manufacturing Technology (AMT). January 2023 orders were down 17% from December 2022 and down nearly 20% from January 2022.
“January orders are down, but the decline is consistent with expectations,” said Douglas K. Woods, president of AMT in a press release. “Although down, it is worth noting that orders in January 2023 are nearly 17% above what would be expected from a typical January. After the historic run of orders placed in the last two years, a mild slowdown in new orders could help to reduce the current backlog and put the manufacturing technology industry in a position to deliver machinery with much shorter lead times when economic activity is anticipated to pick up later in the year.”
According to data compiled by the U.S. Census Bureau, new orders of metalworking machinery exceeded shipments by over $750 million between January 2021 and now. In contrast, the complete opposite was true in 2019, as shipments were over $1.2 billion higher than new orders.
“Despite the mild pullback, distributors with machinery in stock or builders with shorter lead times still have several opportunities,” said Woods.
Although orders from contract machine shops remained relatively consistent from January 2022, the popular technologies have shifted slightly. There has been a significant increase in orders for machining centers with simultaneous 5-axis capability, indicating the need for additional capacity to produce more complex parts domestically.
The construction and mining machinery manufacturing sectors also are likely to be areas of interest in 2023 due to the new pipeline infrastructure that is scheduled to come online in the Permian Basin, which will lead to increased production levels and an uptick in manufacturing technology orders from oil and natural gas mining machinery manufacturers.
In addition, the U.S. Department of Energy announced plans to support the development of domestic sources of lithium, creating another opportunity for mining and construction. Overall, with these developments in mind, the manufacturing technology industry is poised for continued growth in the coming year.