U.S. manufacturing technology dropped 40.7% in January from the previous month, and 11.4% year-over-year.
According to the Association for Manufacturing Technology, which publishes this monthly report, this drop – however severe – is still on track with market forecasts.
"January’s slump was not unexpected as it was in line with analyst forecasts for a soft start to 2017. We continue to be on track for an upturn later in the spring," said AMT President Douglas K. Woods.
“Several large capital expansion projects have been announced in recent weeks, and the PMI was up for the sixth consecutive month," he added. "Our members report increased quotation activity and at the HOUSTEX show in early March, both attendees and visitors were upbeat."
There are several indications of a coming upturn in orders for capital manufacturing equipment. A long list of noteworthy expansion projects has been announced recently by leading global manufacturers, including $386 million for Pratt & Whitney’s Columbus, Ohio, facility, and Toyota’s $600 million investment in Princeton, Ind.
Additionally, the Cutting Tool Market Report for January showed an 8.7% monthly gain in cutting tool consumption, a measure of the primary consumable in the manufacturing process.
Orders for January 2017 totaled $252.21 million, down from December’s $425.18 million. USMTO is a reliable leading economic indicator as manufacturing companies invest in capital metalworking equipment to increase capacity and improve productivity.