US May machine tool demand off 36.4 pct from yr ago

Reuters ^ | Sun July 13, 2003 05:58 PM ET | Staff

[arete]

WASHINGTON, July 13 (Reuters) - U.S. machine tool demand fell in May from the year-ago month, and also fell slightly from April, two industry trade groups said in a joint report on Sunday that underlined the sluggishness of the economy.

The American Machine Tool Distributors' Association (AMTDA) and the Association for Manufacturing Technology (AMT) said U.S. May machine tool demand stood at $140.78 million, down 36.4 percent from $221.25 million in May 2002.

May demand was also off 0.8 percent from a revised $141.90 million in April. April demand was revised downward from $169.57 million reported a month ago.

In the first five months of 2003, machine tool demand totaled $697.95 million, down 24.4 percent from $923.50 million in the same 2002 period, the groups said.

"America's investment in modern manufacturing equipment is at one of its lowest points in history," AMT President Albert Moore said in a statement.

The Commerce Department on July 2 revised U.S. May durable goods orders to a 0.4 percent drop from a previously reported 0.3 percent decline.

Machine tools are used to shape metal for such products as car engines, refrigerators and television sets. Demand for these tools can provide a leading indicator of the pace of manufacturing.

The machine tools report is generally based on a survey of about 200 manufacturers, distributors and importers of machine tools that represent 76 percent of the machine tool market.

[Lessismore]

From http://www.manufacturingtalk.com/news/mlw/mlw100.html

The newsletter reports that China was the world's largest machine tool consumer in 2002 ($5,696m), followed by Germany ($4,815.2m), Japan ($3,441m) and USA ($3,324.8m).

The UK ($689.9m) now lies at eleventh place after Spain, Canada, Taiwan, France and South Korea.

Italy as the world's fifth largest machine tool consumer (US$ 2,931.5m).

The world's largest machine tool producer continues to be Germany ($6,737.5m) followed closely by Japan ($6,379m).

The UK is the eleventh largest producer ($611.9m).

In more detail - The Peoples Republic of China moves from number four to first place in consumption of machine tools, according to the most recent annual survey of production and trade in that class of equipment.

Chinese durable-goods factories acquired an estimated $5.7-billon worth of the production equipment in 2002, for the first time out-investing their competitors in Germany, Japan and the United States.

Chinese consumption gained 20% in a year in which most major consuming nations reduced their annual purchases.

Through the 1990s, the United States had been far and away the leading purchaser of machine tools.

[stboz]

Is Mexican demand up? Is Chinese demand up? Is Malaysian demand up? How do they compare with the U.S.?

[arete]

The economy is like a coiled string.

Geez, I thought they we're saying spring. What we really could use is a few more pro sports and more cable channels.

Richard W.

[templar]

I sure hope he knows what he's doing.

So does he.

[RightWhale]

America's investment in modern manufacturing equipment is at one of its lowest points in history

Machine tools are the tools used to make machines. Perhaps we are importing our manufacturing machines, too. What are we going to do with all this free time and excess wealth?

[raybbr]

Why do you think the Chinese built the dam and power generating plant?

[SC Swamp Fox]

You are thinking about the guys that use the machine tools to make things.

I work for a company that manufactures machine tools. The term "machine tool" can be used to describe a broad category of equipment used by manufacturers to produce parts or products. They are usually expensive, computer controlled machines that allow the user to program multiple tools to perform a series of tasks on a piece of raw material.

My company is a member of AMT, our market segment is off over 70% from 3 years ago. This report is really bad news. We were hoping for a 3rd quarter rally to put us back in the black. We can't downsize anymore, this could be the death rattle.

[arete]

What are we going to do with all this free time and excess wealth?

Go to Disney World and party like there's no tomorrow is what I'm going to do.

Richard W.

[doosee]

We were hoping for a 3rd quarter rally to put us back in the black

The machine tool business is one of the industries that is last to benefit from recovery from a recession. Until the idle capacity sitting vacant is deployed in everything from auto to paper mills, no urgency exists to buy machine tools.

[rmmcdaniell]

Not to worry. Our leaders are firmly in charge and are leading us down the road to prosperity within the framework of a service based economy. More professional girls beach volleyball teams, daytrip bus tours to Atlantic City, and serial refinancing of homes is the future economic engine to real wealth cration for all Americans.

You forgot to include the porn industry.

[Cacique]

The corporate interests (who are the paymasters of the DNC and RNC) have already figured out there are more profits to be made elsewhere. One day when they need their inteersts and money protected they will figure out that we won't have a navy unless our ships are built in korea, our planes in China, our guns in India and our electronics in Singapore. They will of course to build these things for us and we will of course refuse to fight to protect them.

[AntiGuv]

You forgot to include the porn industry.

Where do you think girls beach volleyball teams go when they retire? ;^)

[SC Swamp Fox]

The machine tool business is one of the industries that is last to benefit from recovery

...and don't we know it!

This AMT report simply states what those of us in the business already know, we don't have many orders. If it doesn't turn around soon we will be sunk.

Competitors in Gemany, China, India, Japan and Brazil will happily take our remaining customers. I wonder who the governmant (Army and Navy) will buy their machines from?

[Lessismore]

The economy is like a coiled string.

As in a mattress?

[oceanview]

orders from whom? who is expanding manufacturing in the US?

we know the answers of course. as I said, I don't even know why the government tracks these statistics anymore. Manufacturing is going to be a niche industry in the US, only highly specialized areas will survive.

[A. Pole]

The newsletter reports that China was the world's largest machine tool consumer in 2002 ($5,696m), followed by Germany ($4,815.2m), Japan ($3,441m) and USA ($3,324.8m). The UK ($689.9m) now lies at eleventh place after Spain, Canada, Taiwan, France and South Korea. Italy as the world's fifth largest machine tool consumer (US$ 2,931.5m).

Good measure of future productive capacity (unless you count lawyers). USA between Japan and Italy?

[arete]

Where do you think girls beach volleyball teams go when they retire?

Humm -- good question. Off to teach college level and graduate courses in volleyball perhaps?

Richard W.

[oceanview]

the US will (should) be alot like Italy, in that the Italians manufacture some very specialized items, high quality, high price, but they have a market for them. All the top baby products are Italian (cribs, high chairs, strollers, furniture) for example. US manufacturers in areas under intense competition from foreign countries need to start going this route. I've read several stories about how the entire North Carolina furniture industry is evaporating at an incredible rate.

[dalereed]

"Oh, wonder if they were made in China ?"

I think the figures include all machine tools no matter where they were manufactured.

[A. Pole]

the US will (should) be alot like Italy

Problem is that US has five times more population than Italy.