Consumption of U.S. manufacturing technology declined from March to April, ending a two-month upswing in orders for machine tools and related equipment, though sales remain significantly above year-ago levels.

The total value of United States manufacturers’ machine tool and related equipment consumption dropped to $222.36 million in April, down 15.6 percent from consumption in March, according to the latest U.S. Manufacturing Technology Consumption (USMTC) report, released Monday. However, the April total was 102.7 percent higher than the $109.69 million reported for April 2009, reflecting major year-over-year gains in demand for manufacturing technology.

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

On a regional level, the largest decreases were in the Southern states, with April machine tech consumption dropping 36 percent from March, to $28.68 million. However, consumption was still 109.1 percent above the total for April 2009, and the year-to-date total of $122.05 million was 76.7 percent higher than the same period last year.

Manufacturing tech consumption in the Midwest dropped from $79.08 million to $57.97 million in April, a 26.7 percent decrease from the March total but 82.2 percent above April 2009 and with a 41.7 percent higher year-to-date total.

In the Western states, consumption fell 19.9 percent to $28.62 million, while remaining 100.4 percent above the prior-year level and 48.2 percent higher year-to-date.

In the Northeast region, April consumption was 6.3 percent below the March level, dropping to $33.90 million, but was up 39.8 percent over April 2009 and 19.7 percent higher year-to-date than in the same period last year.

Machine tech consumption grew in the Central region in April, rising 8.2 percent over March to reach $73.20 million. This total was 185.6 percent above the April 2009 figure and brought the year-to-date total 73.2 percent above the same period in 2009.

Although the overall monthly consumption rate appears to be on the decline, the April drop in orders may be due to delayed spending that temporarily inflated March sales.

“Cautious spending on manufacturing technology in January and February pushed higher levels of investment into the later part of the first quarter, propping up March results,” AMT President Douglas K. Woods said in the report. “While April dipped slightly as compared to March, the level of activity was more than 100 percent better than a year ago. We expect this investment level to be more typical as the year progresses, reflecting manufacturers’ continued cautious optimism.”

According to a report this month from the U.S. Department of Commerce, new orders for manufactured goods rose 1.2 percent in April, reaching $420.1 billion. Goods shipments increased 0.6 percent, climbing to $422.3 billion.

The Commerce Dept. report found that new orders for machinery fell from a seasonally adjusted $26.3 billion in March to $24.5 billion in April, a 7 percent drop. Machinery shipments decreased 3.2 percent, from $24.4 billion in March to $23.6 billion in April.

The decline in manufacturing technology consumption may be due in part to shortages and inadequate supply levels for meeting rising production demand. “For some companies, tight machine-tool supplies are causing production bottlenecks and delivery delays as they gear up to fill new orders or rebuild their inventories,” the Wall Street Journal reports (subscription required).

“Purchases of machine tools and other types of business equipment are still far below pre-recession levels, particularly in developed countries like the U.S., where the recovery has generally been slower and more fitful than in emerging economies like India and China,” the Journal explains. “But because rehiring workers and restocking warehouses take time, many companies are struggling to meet the recovery in demand, and shortages are arising.”

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Resources

Manufacturing Technology Consumption Up 50.6% Year-to-Date
Association for Manufacturing Technology / American Machine Tool Distributors’ Association, June 14, 2010

Full Report on Manufacturers’ Shipments, Inventories and Orders April 2010
U.S. Department of Commerce, June 3, 2010

Machinery Shortages Put Businesses in a Bind
by Justin Lahart
The Wall Street Journal, May 27, 2010