In early October, nearly 250 leaders in the manufacturing technology industry came together in Cleveland to network and prepare their businesses to confront a shifting marketplace. AMT’s annual economic and market forecasting conference, MTForecast, attracted one of its largest attendances ever with a lineup full of expert speakers on a variety of topics.
In early October, nearly 250 leaders in the manufacturing technology industry came together in Cleveland to network and prepare their businesses to confront a shifting marketplace. AMT’s annual economic and market forecasting conference, MTForecast, attracted one of its largest attendances ever with a lineup full of expert speakers on a variety of topics.
Economists Mark Killion of Oxford Economics and Alan Beaulieu both predicted softening in the general economy within the next year but agreed that any dips would be relatively slight and shallow. While neither predicted a doomsday scenario like the 2008-2009 recession, they did report that manufacturing might see slower growth or more contraction than the rest of the economy over the next several years. According to Killion, tariffs continue to be the main driver increasing the risk of a recession, and a downturn in the U.S. market could be a leading indicator for a wider global downturn.
Both economists expect the first half of the 2020s to see strong growth in the general economy. Manufacturers would likewise share in that prosperity. However, the current outlook is a bit more mixed for manufacturing. Over the course of the conference, other experts weighed in with their industry outlooks, giving attendees an idea of what to expect for their markets in the immediate future.
THE GOOD
Aerospace continues to be a bright spot for manufacturing. Even with supply disruptions due to the 737-Max, backlogs are still strong, and orders continue at a strong pace according to the presentation by Forecast International. Boeing even received orders for the Max at the Paris Air Show over the summer, proving that a viable market for the aircraft exists in anticipation of it receiving the go-ahead from governments around the globe. While Forecast International’s presentation mainly focused on market share among the major players in the industry, the context they provided and unit forecasts looking toward the future helped attendees decide where they should invest their resources.
The medical device industry is another bright spot for manufacturing. Bob Marshall of Becton Dickinson gave manufacturers some great tips for selling to the industry and discussed how demographics are working in favor of this industry. Simply put: as the large generation of baby boomers continues to age, the need for more devices, testing, and surgeries will increase. Robotic surgery was one area that Marshall was particularly bullish on. However, he did caution that new regulations from the EU and Brexit could be major disruptors to the industry due to the regulatory framework there.
THE BAD
Unfortunately, the automotive industry continues to face challenges. Kristin Dziczek of the Center for Automotive Research noted how the industry has changed over the past decade as production shifts to outside the United States and consumer preferences shift more toward the CUV market and electric vehicles. And while electric vehicles continue to make the largest gains, it will still take a few more decades for there to be a majority of electric cars on the road due to the number of active internal combustion engine-driven cars and the average lifespan of those vehicles. That being said, she noted that most automakers are no longer designing ICE-only vehicles, something that suppliers in the MT industry need to be aware of.
Regarding the economics of the auto industry, sales have been sluggish for a while now, and trade issues and strikes aren’t helping. While it seems that the major automakers have reached deals with their unions, the strikes lasted longer than originally anticipated and could cost the automakers billions of dollars, thus affecting their ability to invest in new equipment.
Steve Kline from Gardner Business Media presented their annual Capital Spending Survey results from polls of machine shops around the country. In short, while production levels are still relatively high, they are declining, which does not bode well for spending on capital equipment in 2020. Kline outlined key indicators that were contracting and broke down the survey results by various demographic factors. He also pointed to IMTS 2020 as a potential bright spot for the MT industry that may help pull it into recovery after a rough first half of 2020.
THE REST
While there were more than two dozen speakers presenting on a variety of topics over the course of the conference, several clear themes emerged that gave audiences an idea of what the MT market of the future will look like.
AMT’s forecasting conference has always been heavy on data; this year, data itself became a topic discussed in numerous presentations. From a workshop focused exclusively on data kicking off things on Wednesday to both keynote speakers and several track speakers mentioning data’s importance, the use and value of data in manufacturing and decision-making took center stage. Avi Goldfarb from the University of Toronto discussed how data and artificial intelligence can fill in the blanks of what we don’t know, narrow our cone of uncertainty, and make predictions and forecasting cheaper. Paul Zikopoulos from IBM opened Friday by arguing the benefits in having companies act like data and technology companies.
Overall, attendees left Cleveland with a clearer picture of the year ahead for the MT market. But what will set them apart is how they implement the information and data they obtained at MTForecast into their corporate strategies. The three-day conference is designed to help you build a better business plan, but AMT is here the rest of the year with our research service to help you fill in the gaps. Don’t hesitate to reach out with any questions you may have about the MT market, and we look forward to seeing you next year in St. Louis!
