Near-record Number of Manufacturing Tech Orders in Q1

High rate of manufacturing tech orders while GDP dipped almost defies logic, expert said.

Manufacturing Tech Orders
Association for Manufacturing Technology

The Association for Manufacturing Technology (AMT) is reporting this week a near-record number of manufacturing technology orders in the first quarter of 2022, the highest number in two decades. 

These numbers show continued high consumer demand and manufacturer optimism, even in the face of war, supply shortages and other challenges. 

The report provides regional and national orders data for machine tools and related equipment. AMT says that data is a reliable economic indicator of manufacturers' ability to invest in equipment, increase capacity and improve productivity. 

According to AMT:

Monthly orders of manufacturing technology surpassed half a billion dollars for the first time in 2022, totaling $552.3 million in March, according to the latest U.S. Manufacturing Technology Orders Report by AMT. March 2022 orders were 15.2% higher than February 2022 orders and 20.4% higher than March 2021. The first quarter of 2022 had orders totaling $1.47 billion, 26.5% higher than the first quarter of 2021 and the highest Q1 of any year since 1998.

Pat McGibbon, AMT's chief knowledge officer, says the first quarter was impressive for manufacturing technology orders. 

“Previous forecasts had predicted a strong beginning to 2022 and a soft summer which would rebound by IMTS in September, as summer orders are often delayed in anticipation of new products being exhibited at IMTS (International Manufacturing Technology Show)," McGibbon said. "However, inflation, the war, and saber-rattling in the east are creating a level of uncertainty and risk that businesses must consider. Despite these challenges, we see the manufacturing sector continuing to invest in additional capacity.”

According to the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) decreased at an annual rate of 1.4% in the first quarter of 2022. 

“To have one of the best quarters in manufacturing technology orders and then find out GDP was contracting over the same time almost defies logic,” said McGibbon. “However, there have been many instances over the past several months where orders have been up, despite some headwind that would have been a major issue for the industry prior to COVID.”

McGibbon said consumer demand and backlogs will likely continue to fuel orders throughout the summer.