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.

[RLK]

I've been posting similar data every year from surveys done by, I think, Modern Metal Machine Shop. We are now dead in the water as far as metal working is concerned.

[SC Swamp Fox]

AMT is not the government. They are doing the studies because the member companies pay them to track industry trends.

[oceanview]

I was just talking about the approach. Take furniture for example. Any US furniture company that wants to continue operating in the US needs to go upscale, and not try to compete with the run of the mill foreign products. Its going to cost more to make the stuff in the US, so it might as well be top quality materials, design and construction, to go along with the higher price. Have you ever seen Italian kitchen cabinets? they are fantastic. German appliances are also awesome. French cookware too.

[Cacique]

ROTFLMAO

[PatrioticAmerican]

No need for machines, no needs for the jobs that use them, no need for Americans. We are just supposed to consume until broke.

[SC Swamp Fox]

Its going to cost more to make the stuff in the US, so it might as well be top quality materials,

We've tried that approach as well. We have designed and built some of the finest machines nobody will buy. There is no market for them in the U.S. In Europe, the Germans have that segment covered. In Asia, that segment doesn't exist except in Japan. The Japanese buy Japanese. We did sell some in Canada.

[Starwind]

Geez, I thought they we're saying spring.

Common misunderstanding, source of much confusion these days.

[Starwind]

As in a mattress?

Nope. Coiled string - as in all balled up.

[Richard-SIA]

I read every above post.

I am a small time manufacturer, I am disgusted at being forced to buy Chinese for my first machine tools due to the few U.S. made tools price being so high.

I need more tooling to be competitive in my market, but cannot abide buying more inferior Chinese junk, then having to work around their poor quality. On the other hand, the U.S. stuff is just beyond my reach.

All praise Union Labor! (Yea, that's sarcasm!)

[Revel]

I have a bit of personal knowledge about this subject. Besides the obvious loss of manufacturing jobs to China...Did you know that China actually makes Machine tools like Vertical milling machines(VMC) for instance? As the artical states these machines are used for forming metal parts. They can mill,drill,and tap. Basically you can lay down a block on steel on a table and hit a button called "Cycle Start" and the machine takes over. A computer controlls the forming of the part. The machine changes its own bits.

Well the truth is that China has been making these machines for a number years. And guess what? They make them a whole lot cheaper. American machine tool companys are going out of buisness. Including one that I used to work for. As I recall these machines were being shipped to China illegally about ten years ago...When a US machine tool company shut down then some of there machines went to China. These were considered High tech and it was illegal to send them to China. Clinton was involved if I recall.

It should be no surprise that China studied them and started building there own. After all these machines are key to there manufacturing jobs also. At this point in time I suppose they probably make them better than we do. Our industry is in pure survival mode. Mark my words. China will be the death of prosperity in this once great nation. And wee held there hands and taught them how to kill us. Then we gave them the keys to complete the job.

[Revel]

"I am a small time manufacturer, I am disgusted at being forced to buy Chinese for my first machine tools due to the few U.S. made tools price being so high. "

Especially when you have sell your products at such a low price to compete with the Chinese. It is a vicous cycle don't you think? And what makes it so hard to compete with the Chinese? That is a complex question with many correct answers. But the ultimate price of competing with the Chinesse is the lowering of our own quality of life. Sure we can buy cheaper, but what wealth will we have when the jobs are gone or we are forced to work for current Chinese wages. And after we have been gutted don't you think will raise there prices?

[arete]

China will be the death of prosperity in this once great nation. And wee held there hands and taught them how to kill us. Then we gave them the keys to complete the job.

Yep, and once it becomes clear to the average citizen that we have been sold down the river by our so called trusted leaders who have padded their own pockets and the pockets of their friends this whole time, those same leaders will be running around pointing the finger at others and finding scapegoats in order to dodge their own accountablitity. The greed and corruption in Washington knows no bounds except the nations final demise.

Richard W.

[Richard-SIA]

Too damn correct!

And we are still at it, exporting virtually ALL of our core industries off shore as fast as possible.

Disgusting, makes being a little older look like an advantage as I expect (hope?) to expire before this garbage reaches it's logical conclusion.

We had a great country, once.

[Revel]

It gives me at least some confort to know that a few us have some wisdom on this subject. Thanks :)

Oh and please excuse all my typos in my replies above...LOL

[harpseal]

This is but another symptom of the problem of structural problems within the US economy. We have government programs in place that subsidize the outflow of capital from the USA to the Third World and subsidize the imports of consumer goods and services to the USA. The US dollar is still over valued and as such the situation will get worse for a while and then the US dollar will crash. Of course by that time unemployment in the USA will be significantly higher and the social order will have decayed more.

Unless GWB acts now to remedy the situation he is likely to be a one term president as if the unemployment rate continues to go up a Democrat who promises jobs programs to alievate the situation will get elected. I am not stating that a DEmocrat will do anything to improve the situation merely that they will promise to do something. We are facing a situation where manufacturing, engineering, IT, medical services, customer services, and even financial analysis services are all being offshore outsourced. We are continuing to import guest workers while unemployment is at 6.4% and apparently still rising (note the figures are seasonally adjusted). New unemployment insurance claims are rising and still we keep on with the US government subsidizing foreign development to compete with the US workers.

We are in a trade situation where the rules are stacked against us. Airbus industries is subsidized by its governments and Boeing to compete is moving operations to China. Why not? They get government grants and loans to do this courtesy of the US taxpayer. Microsoft has moved many operations to India as have its competitors. Venture capital will not fund US based innovation any more.

Either we change and change soon or the USA will be in civil war soon and no one is going to like that.

[riri]

Either we change and change soon or the USA will be in civil war soon and no one is going to like that

I think that is still along way off.

It will be too far gone until average American realizes what has happened. Even after September 11th, the average American really believes nothing too bad could happen to them. We are a pretty naive country.

I say Americans will batten down the hatches (is that how you spell that expression, anyway..) and take the Subway job, the Wal Mart job, the paper route. Two, three four of them and try to weather it. For a long time, they will think it is only temporary.

Couple that with the fact that we now have a huge population that comes from 3rd world squalor and won't even consider revolting against what is a massive improvement in living standard.

[harpseal]

As the unemployemnt rate gets worse and more and more highly educated join the rolls the discontent will grow exponentially.

[arete]

The American worker has been sold out by Washingtion and Wall Street. It's a done deal like it or not. We buy their manufactured goods and export jobs to them. They in turn take our worthless currency as payment and use it to buy up our debt. Wall Street and Washington insiders get filthy rich and the average American loses his job and heads for the poor house. That is what Greenspan and the politicians and the bankers are doing to us right now.

Richard W.

[Beck_isright]

"I guess when you don't have any manufacturing, you don't need all those expensive machine tools."

Sums it all up pretty neatly.

I wonder how NCR and IBM and those other companies that produce the icon based cash registers for McDonald's and other fast food joints are doing...

[harpseal]

One of the facts of life is that done deals can be reversed. It does, however, probably require a few of these corporate types to wind up hanging from lamp posts.