Manufacturing technology orders in the U.S. totaled $435.7 million in March 2024, an increase of nearly 25% from February 2024, according to a report published by the Association of Manufacturing Technology (AMT).
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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 were 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. 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 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.
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 an 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.
