A Winter Nap Before Spring Growth for Manufacturing Technology Orders

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The October 2015 U.S. Manufacturing Technology Orders report showed orders were 17.4 percent lower as compared with the first 10 months of 2014, an unexpected drop. However, the rest of the economy is performing well. Significant growth in consumer spending, services and capital investment have helped add weight to the economy.

We have seen some challenges with commodity prices, which have increased expenditures but also put pressure on the profits that they generate. We all know lack of profits means lack of money to invest. A recent economic symposium by the Federal Reserve Bank predicts 2015 will show a 2.4 percent growth in GDP over 2014.

We have had similar numbers in the past, which have usually indicated good business for everyone, including the manufacturing technology industry. But those do not appear to be the conditions right now. As we go into 2016 the Federal Reserve is looking for the number to grow modestly and just enough that we should see manufacturing technology orders rise in late spring and early summer.

What’s generating all this?

According to the latest jobs report, the economy added 211,000 jobs. However, manufacturing jobs fell by 1,000 units in November. This really isn't a surprise to anyone in our industry as it's typical at this time of year for manufacturing companies to try to bolster profit.

What does this mean for manufacturing as a whole?

For the next six to seven months we should see a little flatness in manufacturing technology, and then acceleration in the industry. By the end of 2016 manufacturing technology orders will be up.

What can we do to make sure this happens?

Contact your legislator right now as they are considering a bill on tax extenders, important for businesses needing to invest in new equipment. Enacting this legislation enables people to buy more production equipment by raising investment in R&D.