U.S. manufacturing technology consumption rose in the latest month reported, marking a return to growth after a significant decline in orders and strengthening the machine tool market recovery.

The total consumption value of machine tools and related equipment from United States manufacturers rose to $163.96 million in February, a 28.8 percent increase over January, according to this week’s U.S. Manufacturing Technology Consumption (USMTC) report. The February 2010 consumption total was also 22.1 percent above the $134.34 million reported for the same month last year.

Based on data from the American Machine Tool Distributors’ Association (AMTDA) and Association for Manufacturing Technology (AMT) member companies, the USMTC report provides national and regional U.S. sales figures for machine tools and related equipment in the manufacturing industry.

On a regional basis, the largest monthly gains were in the Central region, with February tech consumption rising 102.1 percent from January, to a total of $53.2 million. Purchases in the region were 76.6 percent more than the total for the same period last year.

In the Western states, manufacturing tech consumption rose 91.9 percent from the previous month, marking a 39.1 percent increase over the region’s consumption in February 2009. Meanwhile, sales in the Midwest rose 19.7 percent over January and were 9 percent higher year-over-year. In the Northeast, consumption increased 6.1 percent from January but was down 3.1 percent from February 2009. Consumption in the Southern region dropped 33.2 percent from January to February and fell 11 percent below the same period last year.

The USMTC’s reported February gain brought year-to-date machine tech consumption to $291.27 million, 22.3 percent above the same period in 2009.

However, despite the positive signs, concerns remain over credit availability for the equipment industry.

“Manufacturing technology orders start off 2010 up 22 percent through February, showing that the market has turned and is slowly recovering from the worst single year downturn in our industry’s history,” according to AMT President Douglas K. Woods. “That increase could be twice as large if banks would ease credit restrictions. Our banks have a tenth of our GDP and nearly 24 times the required reserve in the Federal Depository when that money should be working to rebuild America.”

According to the U.S. Department of Commerce late last month, new orders for manufactured durable goods in February rose 0.5 percent over January, the third consecutive monthly gain. New machinery orders, up three of the last four months, climbed 4.7 percent in February, representing the largest durable goods increase for the month. Machinery shipments rose 2.7 percent in the same period. Year-to-date, machinery orders are up 6.4 percent, while shipments are down the same percentage.

Although manufacturing technology consumption declined in January, much of the loss was offset by February’s promising sales figures. As year-over-year and year-to-date machinery orders continue to improve, the upward trend may result in 2010 being a stronger year for equipment sales than 2009.

“Companies are focusing spending on equipment that can deliver an immediate benefit, rather than items whose benefit will accrue over years,” the Wall Street Journal reports. Daryl Dulaney, chief executive of Siemens Industry Inc., told the Journal he “had seen an increase in orders for automation equipment” and that “demand for green technology such as equipment for wind turbines is also on the rise.” Dulaney cited nonresidential construction as “the weakest area for spending.”

Recent: Manufacturing Tech Consumption Down in January

Resources

Manufacturing Technology Consumption Up 22% through February
Association for Manufacturing Technology / American Machine Tool Distributors’ Association, April 12, 2010

Durable Goods Manufacturers’ Shipments, Inventories and Orders February 2010
U.S. Department of Commerce, March 24, 2010

Businesses Spend More
by Justin Lahart
The Wall Street Journal, March 25, 2010