The U.S. Manufacturing Technology Orders report (USMTO) for January 2016 showed that order values were down 30 percent from December, according to AMT – The Association For Manufacturing Technology. Year-over-year orders declined 21 percent.

“The drop in orders was not unexpected,” explained Douglas K. Woods, President, AMT. “January numbers are typically lower than December as companies that have financial years synced with the calendar year place delayed orders based on where they are relative to budget goals.”

“This cycle will be less dramatic in 2017,” Woods added. “The temporary tax incentives which have spurred year-end buying decisions for more than a decade are now permanent or extended for several years.”

The automobile, aerospace and medical sectors are currently driving orders, while the off-road construction; oil and gas; and agriculture sectors continue to struggle. As a result, the Southeast region is particularly strong when compared to other regions of the country, due to the significant presence of auto, aerospace and medical companies in this region.

Although orders were down, January average unit values hit their highest level since January 2015 suggesting manufacturers are buying more sophisticated manufacturing technology to ramp up productivity rather that expand operations which would show a broader increase in orders and lower unit values.

“Despite today’s soft market, the mood from the 400+ manufacturing technology suppliers and buyers that attended the recent MFG meeting was upbeat, as were the forecasts,” said Woods. “Manufacturing leaders from across the country gathered to gain insight into how technology can make their companies more productive, secure and flexible in an increasingly digital landscape. They are looking forward to 2016 finishing strong.”

Forecasts from The MFG Meeting, the joint annual meeting of members of AMT and the National Tooling and Machining Association, suggest that the U.S. economy is poised for growth along the lines of 2.5 – 3.5 percent driven by the consumer demand. Analysts speaking at the conference also expect China’s economy to rebound sooner than expected, and oil prices to reach $45 a barrel by year’s end.

AMT expects the overall market for manufacturing technology to remain weak well into the spring and summer months. Activity should slowly begin to turn around this fall. September’s IMTS – The International Manufacturing Technology Show 2016 is poised to deliver a significant boost in sales in the fourth quarter.

USMTO data is a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity.

October US cutting tool consumption totaled $193.6 million, according to the US Cutting Tool Institute (USCTI) and AMT – The Association For Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report (CTMR) collaboration, was up 9.7% from September’s total and up 3.3% from October 2013.

These numbers and all data in this report are based on the totals actually reported by the companies participating in the CTMR program. The totals here represent about 80 percent of the US market for cutting tools.

“October 2014 has given some indication that we have turned the proverbial corner in the cutting tool industry,” said Tom Haag, president of USCTI. “Sales volume has recorded the best month in over two years going back to March 2012 and four of the last five months have outperformed 2013. The increased sales immediately after IMTS in Chicago have created a momentum that has continued to swell into the fourth quarter.”

The Cutting Tool Market Report is jointly compiled by AMT and USCTI, two trade associations representing the development, production and distribution of cutting tool technology and products. It provides a monthly statement on US manufacturers’ consumption of the primary consumable in the manufacturing process – the cutting tool. Analysis of cutting tool consumption is a leading indicator of both upturns and downturns in US manufacturing activity, as it is a true measure of actual production levels.

Historical data for the Cutting Tool Market Report is available dating back to January 2012. This collaboration of AMT and USCTI is the first step in the two associations working together to promote and support US-based manufacturers of cutting tool technology.