2012 looking better than expected!Top ten indicators are positive
The Mayans may be predicting the end of the world in 2012, but U.S. manufacturing, and manufacturing technology in particular, certainly would not be able to support that position. The year is only a quarter old, but the numbers for manufacturing technology don’t appear to be slowing. Year-to-date orders are up more than 20 percent over the first quarter of 2011. A continuation of this trend through the next quarter is supported by the dashboard appearing here. Broken down by the numbers, the dashboard is impressive in that 80 percent of the indicators are positive (green), no indicator is pointing downward, and only one indicator remains in the red zone. The take on the current dashboard is that the odds are for continued growth in the second quarter of 2012. The worst case scenario, sans a major disaster, is for the second quarter to be on par with the first and only slightly larger than the second quarter of 2011. The strength of the indicators suggests a year-end number clearly up over 2011.
Keeping an eye on the indicators for changes that will have a positive or negative effect on the current outlook is critical. Indicators likely to have a positive impact on the outlook are the capacity utilization figures as we climb toward 80 percent. The flyer in this area would be the housing starts. The other is the potential of the Purchasing Managers’ Index (PMI) climbing above 55 in the second quarter, which would signal a likely increase in manufacturing’s growth rate and signal a stronger than expected third quarter manufacturing technology orders rate.
On the downside, there are three things to keep an eye on. The top two are: the possibility of the AAA bond rate moving negatively as political uncertainty creeps into risk assumption; and light vehicle sales which could go either way in the next 2 quarters. The third one to keep an eye on is the PMI. It’s expected to remain above 50, but any sudden decline in the index should be eyed with caution.
The best indicator
The most impactful and accurate short-term indicator for our industry remains the benchmarking surveys that AMT produces for its members and participants in the North American manufacturing technology markets. Looking at the latest information available from USMTO, the most significant manufacturing technology growth industries in 2011 were machine shops and the oil and gas field machinery industries. They showed the highest percentage point increase in share of all orders placed as compared to a year ago of the 27 key market industries the USMTO program tracks.
If you participate in the USMTO, you can find this information in the industry reports on USMTO.com. If you participate in any of the AMT market benchmark surveys, you can retrieve, analyze the trends, develop slide sets and create presentations by subscribing to MTInsight.org. The key to either method is participating in AMT’s monthly market benchmarking reports, which takes only a few minutes each month.
Inside MTInsight, AMT’s business intelligence tool for manufacturing technology, participants can access new geographic industry breakouts that show which states have contributed the most toward the growth in consuming industries. For example, it turns out that Texas had the most significant impact on the increase in the machine shop industry’s overall gain in national share in 2011. Texas is followed by Washington, Connecticut, Michigan and Wisconsin.
Questions
If you have any questions about the information presented above or about AMT member services in general, please contact Pat McGibbon at 703-827-5255 or pmcgibbon@AMTonline.org.
Producer Price and Wage Report
The Producer Price Index for Finished Goods increased 0.9 percent in March to 194.4 (1982 = 100). Compared with the level a year earlier, finished goods prices increased by 2.8 percent. Prices for crude manufacturing materials increased 3.7 percent from February and 3.7 percent from a year ago.
The metal cutting machine tool index increased 0.7 percent, and the metal forming machine tool index increased 0.2 percent. Compared with last March, metal cutting prices rose 4.8 percent and forming prices rose 3.2 percent.
For more information or for a copy of the complete Producer Price & Wage Report, contact Russell Waddell, Industry Economist, at 703-827-5258 or rwaddell@AMTonline.org.
Foreign Trade Report – February 2012
U.S. machine tool exports valued $204.2 million in February, up 17.2 percent from January’s total of $174.2 million. Exports for year-to-date 2012 totaled $378.4 million, an increase of 0.1 percent when compared with the same period of 2011. Monthly machine tool imports valued $421.8 million in February, down 12.8 percent from January’s total of $483.9 million. Imports for year-to-date 2012 totaled $905.7 million, an increase of 79.2 percent when compared with the same period for 2011.
Mexico was the leading destination for U.S. machine tool exports in February with $38.5 million, a 35.8 percent increase from January. The second largest destination for U.S. machine tool exports was China, with $34.1 million, a 29.8 percent decrease from January. Completing the top five destinations for U.S. machine tool exports were Canada ($22.7 million), India ($13.3 million) and Germany ($10.7 million).
Japan ($187.7 million) and Germany ($66.5 million) were the top suppliers of the U.S. machine tool imports for February 2012. Compared with January’s figures, Japanese imports decreased by 3.7 percent and German imports decreased by 6.6 percent. Completing the top five sources of U.S. machine tool imports in February were South Korea ($36.4 million), Taiwan ($30.1 million) and China ($17.7 million).
With MTInsight, you can interactively evaluate the imports and exports of machine tools by the United States. Discover all of the countries with whom the United States is trading, scrutinize that trade at the most detailed commodity classification level, and interpret the progression of U.S. machine tool trade over time.
For more information about any aspect of this report or to make a specific data request, contact Kim Brown, Industry Engagement Manager, at kbrown@AMTonline.org or 703-827-5223.
For more information about any aspect of this report or to make a specific data request, contact Kim Brown, Industry Engagement Manager, at kbrown@AMTonline.org or 703-827-5223.