Consumption of machine tools and related equipment by manufacturing companies in the United States totaled $129.16 million in August, down 14.8 percent from July, according to the latest U.S. Manufacturing Technology Consumption (USMTC) report from the American Machine Tool Distributors' Association (AMTDA) and the Association for Manufacturing Technology (AMT). This total is 63.3 percent below August 2008 levels.

Based on input from AMT and AMTDA member companies, the groups' USMTC report provides national and regional U.S. consumption data of domestic and imported machine tools and related equipment.

On a regional basis, the largest gains were in the Northeastern states, with August manufacturing tech consumption rising 12.3 percent over July. Despite the August 2009 increase, purchases in the region were down 52.1 percent from the same month last year.

Manufacturing tech consumption in the Southern region also rose in August, to $23.59 million. This represents an 8.1 percent increase from July's $21.82 million. However, the year-to-date total ($152.26 million) in these states is nearly 69 percent below the same period in 2008.

Meanwhile, August manufacturing tech consumption in the Midwest dropped 15.3 percent from July to $33.33 million in August, and consumption in the Western region ($17.41 million) was 2.6 percent less than July's $17.87 million. Purchases of manufacturing tech in the Central region of the U.S. were down 39.9 percent from July.

With a year-to-date total of $1.04 billion, U.S. manufacturing technology consumption in 2009 is down 67.7 percent compared with 2008.

"We are cautiously optimistic that manufacturing has hit bottom and will begin to move forward," AMT President Douglas K. Woods said. "But it's going to take time before technology providers feel the impact in their backlogs."

Prior to the latest issue of the USMTC report, sales of U.S. machine tools and components had risen for three consecutive months prior to August, in line with a three-month uptick in new orders for manufactured goods. As a whole, the U.S. manufacturing sector finally achieved growth in August, for the first time in 18 months, the Institute for Supply Management (ISM) reported in its August 2009 Manufacturing ISM Report on Business. (See U.S. Manufacturing Finally Turns Around)

However, according to the U.S. Department of Commerce, new orders for manufactured durable goods declined 2.4 percent to $164.4 billion in August. Machinery orders rose by less that 1 percent over July levels after a nearly 8 percent decline during the previous month. (See Durable Goods Orders Drop Unexpectedly)

According to Cliff Waldman, economist for the Manufacturers Alliance/MAPI, "the emerging U.S. and global economic recovery will be weak and laced with uncertainty at least for the first year or two."

Although the manufacturing sector is gradually recovering, the machinery industry seems to be taking longer to reach a turnaround. Experts purport that a strong level of new orders of machinery and other manufacturing equipment depends on sustainable industrial output along with higher levels of activity among machine shops. (See 2009 Machinery Demand Hinges on Industrial Production Growth)

"Financial strength is likely to resume its decline due to the cumulative impact of lower sales and difficult collections on machine shop balance sheets. However, there are increasing signs of companies, at the least bottoming and, in many cases, starting to replenish inventories," Harry Moser, chairman of GF AgieCharmilles, said in the company's latest Machining Business Index.

The Manufacturers Alliance/MAPI's September 2009 Survey on the Business Outlook report indicates that although the economic recovery in manufacturing is likely to be marked with numerous rough patches, there are emerging signs that the sector has reason to be optimistic.

Earlier

2009 Machinery Demand Hinges on Industrial Production Growth

U.S. Manufacturing Finally Turns Around

Durable Goods Orders Drop Unexpectedly

Resources

Manufacturing Technology Consumption Down in 2009
Association for Manufacturing Technology / American Machine Tool Distributors' Association, Oct. 12, 2009

Durable Goods Manufacturers' Shipments, Inventories and Orders: August 2009
U.S. Department of Commerce, Sept. 25, 2009

Analysis on Durable Goods: Emerging Recovery Looks to be 'Weak and Laced With Uncertainty'
by Cliff Waldman
Manufacturers Alliance/MAPI, Sept. 25, 2009

Machine Shops' Activity at Record Low Level
Agie Charmilles LLC, April 2009

MAPI Survey on the Business Outlook-September 2009
by Donald A. Norman
Manufacturers Alliance/MAPI, Oct. 15, 2009

MAPI Survey on the Business Outlook: Improvement on Horizon for Industrial Sector
Manufacturers Alliance/MAPI, Oct. 15, 2009