Last week, AMT’s MTForecast 2022 included two days of presentations from experts in economic forecasting and market data to help manufacturing technology leaders make informed business decisions. Here are the top three takeaways:
1. The overall economic downturn will be short and have mixed impact on manufacturing.
In the next year, the recession will be mild and bottom out in the third quarter of 2023, followed by a sustainable rebound. Machine tool output is forecasted to be in line with 2019 levels. Due to the backlog of orders resulting from supply chain problems, 2023 machine tool orders will not increase but shipments will. Conversely, shipments and orders for machine tool accessories in 2023 will increase. Many customer industries will expand, such as aerospace and transportation, while accessory and mold investments will see greater volatility.
2. Disruptions in the auto industry are creating opportunities for parts manufacturers.
The automotive sector is a changing landscape as the big brands evaluate current methodologies and rethink their plans for the future. Electric vehicles have fewer parts and less complex manufacturing needs, but internal combustion engine vehicles will remain the dominant choice for the next few years. Once EV pricing and regulatory incentives are created, the tipping point for EV demand is expected around 2029.
3. Stagnant interest rates will reduce large capital purchases.
The Federal Reserve has provided good inflation rates for the last 40 years, allowing manufacturing in the United States to grow unabated with only modest recessions. Now the Fed is at a point where it cannot reduce interest rates until inflation begins to recede. This will have the greatest impact on large machine purchases. As the economy improves in the second half of 2023, these purchases will be slow to pick up again.
Check back at AMTonline.org to learn more about the outcomes from AMT’s MTForecast 2022.
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