Electrical-Equipment and Power-Gen Manufacturers Investing at a High Rate
July 8, 2024Comments
Orders of manufacturing technology, measured by the U.S. Manufacturing Technology Orders Report published by AMT – The Association For Manufacturing Technology, climbed in May by nearly 22% compared to April, and were 6.5% above May 2023 levels. May marks the first month in 2024 where the value of orders placed exceeded those of the same month the previous year. Through the first five months of 2024, orders have decreased 12.2% compared with the same period in 2023.
Manufacturers have started to realize they no longer can outwait the Fed’s “higher for longer” interest-rate strategy, say AMT officials. As a result, they have begun to increase capital equipment purchases to meet the sustained demand for goods and machinery.
Contract machine shops, the largest consumer of manufacturing technology, increased their orders from April to May 2024, but at a slower rate than the industry’s overall growth. And while some OEMs have made additional investments despite heightened interest rates, contract machine shops have consistently failed to keep pace with the overall market throughout 2024.
Electrical-equipment manufacturers are enjoying the best start to the year since a record-setting start of 2022. Similarly, manufacturers of power-generation and transmission equipment are investing at the second-highest year-to-date rate since 2008. These industries undoubtedly benefit from the government investment authorized by the CHIPS and Infrastructure acts and therefore are less sensitive to interest rates.
See also: Association for Manufacturing Technology
Technologies: Management
