Manufacturing Technology Orders Surge in March 2024, Driven by Southeast and West Regions
Manufacturing technology orders, as reported by the U.S. Manufacturing Technology Orders Report from AMT – The Association For Manufacturing Technology, hit $435.7 million in March 2024, marking a nearly 25% increase from February 2024. March orders are typically a large increase from February, as many builders of manufacturing technology end their fiscal year in March. Although the typical bump over February was seen in the data, March 2024 orders were 21.3% below those of March 2023. Year-to-date orders reached $1.13 billion, an 18.6% decline from orders in the first quarter of 2023. Forecasts from the beginning of the year relied at the time on the widely accepted belief that the Federal Reserve would reduce interest rates three times over the course of 2024. As time went on, inflation remained stubbornly high, the labor market retained its strength, and the probability of rate cuts dwindled. This led to the Federal Reserve’s “higher for longer” interest rate strategy, which has been limiting growth and causing some hesitation for business investment. Despite this general unease, there remain several pockets of opportunity driven by government spending and technological advancement. Orders from contract machine shops increased in March 2024 to their highest level in the last year. Despite this increase, average monthly orders from contract machine shops are 11.3% lower in 2024 than in 2023. Customers ordering parts from contract machine shops have increasingly turned away from longer-term procurement cycles in favor of placing month-by-month orders or making sporadic, one-off purchases. As a result, machine shops have been hesitant to make additional machinery investments. Electrical generation and power transmission equipment manufacturers helped drive the increase in orders from February to March 2024, which reached their highest level since March 2023. Orders from this sector had been on an upward trend since September 2023 because of government investment in new energy technologies. This sector is positioned to become a reliable source of growth in the future from the increasing need for energy as our economy becomes more digitalized and AI begins to play a larger role in daily life. Bucking the national trend, both the Southeast and West regions showed growth in manufacturing technology orders when comparing the first quarters of 2023 and 2024. Orders in the Southeast were driven by a massive increase in orders from the aerospace sector as military investment in projects increased in recent months, and some manufacturers relocated from states with less favorable business environments. Growth in the West was driven by orders from computer and electrical equipment manufacturers as government and private investment in semiconductor manufacturing comes online. To learn more about the economic trends highlighted above and the updated forecast for manufacturing technology orders, AMT is hosting the Spring Economic Update Webinar on May 13 at 1:00 p.m. EDT.
