Latest Report Points To Ongoing Weakness In Manufacturing
American Machinist, citing the Association for Manufacturing Technology latest report on US orders of machine tools, said new orders in October were down 0.3% from 328.49 million in September to $327.39 million. AMT notes that the October figure was down 28.3% from the same period one year ago. Through the first 10 months of 2015, order volumes totaled $3.45 billion, a 17.4% decline from the prior 12 months. The metric does not track with manufacturing production, but is valuable as a leading indicator of manufacturers’ confidence in future output. The declining trend indicates that the factors that have hampered manufacturing expansion, the strong dollar and weak markets overseas, will likely continue to persist in future months. Commenting on the data, AMT President Douglas Woods said that although the US economy “continues to grow at a moderate pace, the manufacturing sector is struggling with the effects of a strong dollar, reduced commodity prices, especially oil, and struggles in key export markets like China.” Manufacturers, he said, “are not making significant capital investment in new manufacturing technology.”
What This Means For Small Business
The declining trend in machine tool orders points to ongoing manufacturing sector weakness and tracks with other leading indicators, such as durable goods orders. The trends mean small businesses dependent on the sector will continue to face economic headwinds and tepid long term growth.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.