Machine tool orders posted a small monthly gain in May but were far below year-earlier levels, the Association for Manufacturing said today.
Orders totaled $378.4 million for May, a 7.3 percent increase from an adjusted $352.8 million in April, according to a monthly report.
However, May orders plunged 22 percent below the $484.2 million for May 2018, AMT said.
“Manufacturing technology orders will be good but smaller than 2018,” Pat McGibbon, chief knowledge officer for AMT, said in a statement.
“We will see a significant move in the customer mix as large manufacturers shift capital liabilities down the supply chain or into the machine shop sector,” McGibbon added. “In the past four months, the share of total orders placed by machine shops increased more than 20 percent. This is typical of business cycles with disruptions rather than a decline in manufacturing activity.”
For the first five months, machine tool orders slid 13.5 percent to $1.87 billion, compared with the same period in 2018.
The figures are based on information from companies participating in McLean, Va.-based AMT’s U.S. Manufacturing Technology Orders (USMTO) program.
Manufacturing is showing signs of slowing. The Institute for Supply Management’s manufacturing index, known as the PMI, indicates that demand is at “no growth” levels. Only 45,000 manufacturing jobs were created in the first half of 2019, compared with 142,000 for the same period last year, according to Bureau of Labor Statistics figures.
Machine tool orders face uncertainty because of the U.S.-China trade war. The U.S. has levied tariffs on Chinese goods, with China retaliating. Tariffs are a tax on imported goods. Importers pay tariffs and usually pass the cost onto customers. Tariffs are not payments from one country to another.