According to The Association for Manufacturing Technology (AMT), the forecast for manufacturing technology demand calls for "continued but slower growth.Handmade oil paintings for sale at museum quality," That comment comes on the heels of a resurgence in U.S. manufacturing technology orders that put the year-to-date (Dec. 26, 2011) total at $463.32 million, up 80.5% compared with 2010, and the second highest dollar amount in the last 15 years.
"It's long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity," said Douglas K. Woods, AMT president. "These machines and devices are the equipment that turn raw materials such as steel, iron, plastic, ceramics, composites and alloys from their original state as stock materials into what will become durable goods such as airplanes, cars, and appliances, as well as consumer and other goods that are used every day."
Throughout 2011, various machinery and equipment producers for the plastics industry have reported extremely good sales numbers. Sumitomo Demag Plastics Machinery GmbH, said in a mid-May release that the company "is pleased about the high level of capacity utilization at its factory" in Wiehe, Germany. It went on to boast of "substantial orders" from both domestic and international customers such as the one from geobra Brandstatter for 50 hydraulic Systec machines for the production of Playmobil toys, headquartered in Zimdorf, Germany.
"Substantial orders from China, Mexico and Turkey confirm the upward trend to be observed in many important markets abroad that suffered a particularly bad hit during the financial and economic crisis," said Christian Renners, GM of the sales and after sales business unit at Sumitomo Demag.
Word on the street from various sales sources say that North American molding manufacturers saw similar sales upturns in 2011. The future for North American molders in 2012 appears to be one of higher capacity utilization as well, note some of these sources who say that they're seeing many of the larger mold manufacturing operations out 25-30 weeks in backlog.
CBW Automation in Fort Collins, CO,Spro Tech has been a plastic module & Mold Maker, has seen a big spike in orders for its automation equipment. "We've hired 30% more people, are running additional shifts, and have invested in additional capital equipment for our production floor," said David Carson, CBW president. "This appears to be a very solid manufacturing turnaround."
Tax incentive fueled?
Did the accelerated depreciation tax break given by the federal government have anything to do with these increased sales of machinery and equipment. "Our research says it had some impact on people's willingness to drive investment sooner, and to get the added incentive is beneficial," commented AMT's Woods in an interview with PlasticsToday. "This year, many in the manufacturing industry essentially had a good year compared to previous years and as they looked at their cash position and tax position, decided to make the investment, with or without that expensing ability of the accelerated depreciation. Many are in better financial position and are trying to reposition themselves better with regard to taxes."
CBW's Carson said, "My understanding is that the equipment has to be delivered and installed by year end, but we booked orders into the new year as of 20 weeks ago, so I'm not sure how much the accelerated depreciation had to do with it. I think there's a lot of money on the sidelines - a lot of cash - and nowhere else to go with their money, so they're buying capital equipment."
Woods noted that the uncertainty principle is a factor as well. "Company owners are uncertain about taxes and government regulations that might be coming in 2012, and this uncertainty drove people to act in 2011," he said. "There are several bills [in Congress] trying to maintain the accelerated depreciation on capital equipment, but company owners aren't counting on that. They believe in playing what you've got in your hand today. Business had the ability to invest in 2011 when they were doing much better."
Additionally, Carson said he's seeing a lot of "pent-up demand" for equipment and believes that reshoring of some manufacturing has contributed to that. CBW serves primarily the packaging and medical industries, which as far as Carson's business went, didn't take much of a dip. However, he acknowledges that he's seeing "bigger demand for automation," for several reasons: "companies that want to upgrade molds and/or molding machines and need new automation for improved efficiencies, as well as automation for new technology specifically in-mold labeling, which brand owners are adopting, a technology that translates into cost savings."
CBW didn't let any grass grow under its feet during the downturn either, which Carson said also contributed to demand for its products.A mold or molds is a hollowed-out block that is filled with a liquid like plastic, "We have worked hard to develop new products for new markets," he stated. "The most significant is automation to unload cartons at Filling Lines. New-product development has truly been a factor in our increase of orders."
Pent-up demand for new equipment, new products and new technology just might be the key to the dramatic increase in manufacturing technology orders. The AMT report noted that new orders were up the highest in the Midwest and Central regions of the U.Husky Injection Mold Systems designs and manufactures a broad range of S., with the Midwest's manufacturing technology orders for 2011 up 105% more than the comparable figure for 2010. "It's also where the oldest equipment resides and the industries impacted most by the weak dollar and reshoring trend are located,The EZ Breathe home Ventilation system is maintenance free," noted the report.
The average age of machinery currently in use at U.S. manufacturing facilities crept up from nine years in 2007 to 13.5 years, and as demand started to increase the need for investment to replace the aging equipment became apparent, noted the AMT's report. Concurring with Carson's observations, the AMT report also adds that "those investments are being made in completely new technology."
With regards to the reshoring trend that nearly everyone mentions when talking about improving capacity utilization, the AMT report noted, "More work is coming back to the U.S. from foreign shores and there is greater foreign direct investment in U.S. facilities. The quality of work in the U.S. is proving to be more valuable than originally thought in the off-shoring investment calculation."
Additive manufacturing is growing, nano-machining has become commercially affordable, and the availability of new materials, such as compact powdered metals, are having a tremendous impact.
Woods added, "The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time. This is something that's never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S."
The outlook for 2012, said the AMT report, "remains positive" due to a weak dollar making exports strong and the manufacturing base's reinvesting in the latest tools. "The automotive industry is making major changes to address green issues, which will lead to significant investments in production technology, as well as spending to support the shift of the industry's center from Detroit to the South/Southwest."
That said, Woods stated that "manufacturing in America still needs help." In spite of the number of Americans out of work, manufacturing jobs "continue to go unfilled. That is because the factory floor today is very different from what it used to be. It is awash with new technologies and processes that require advanced training and adaptable skills. We need a 'smartforce' of workers who are up to the job."
The AMT is also calling for help in leveling the playing field for U.S. companies in the global marketplace "by eliminating trade barriers, reining in regulations, and lowering taxes for manufacturers or we risk losing ground to our foreign competitors in new markets and industries," commented Woods.
"It's long been recognized that analysis of manufacturing technology orders provides a reliable leading economic indicator, as it is an indicator that manufacturing firms are investing in capital equipment to increase their capacity and improve productivity," said Douglas K. Woods, AMT president. "These machines and devices are the equipment that turn raw materials such as steel, iron, plastic, ceramics, composites and alloys from their original state as stock materials into what will become durable goods such as airplanes, cars, and appliances, as well as consumer and other goods that are used every day."
Throughout 2011, various machinery and equipment producers for the plastics industry have reported extremely good sales numbers. Sumitomo Demag Plastics Machinery GmbH, said in a mid-May release that the company "is pleased about the high level of capacity utilization at its factory" in Wiehe, Germany. It went on to boast of "substantial orders" from both domestic and international customers such as the one from geobra Brandstatter for 50 hydraulic Systec machines for the production of Playmobil toys, headquartered in Zimdorf, Germany.
"Substantial orders from China, Mexico and Turkey confirm the upward trend to be observed in many important markets abroad that suffered a particularly bad hit during the financial and economic crisis," said Christian Renners, GM of the sales and after sales business unit at Sumitomo Demag.
Word on the street from various sales sources say that North American molding manufacturers saw similar sales upturns in 2011. The future for North American molders in 2012 appears to be one of higher capacity utilization as well, note some of these sources who say that they're seeing many of the larger mold manufacturing operations out 25-30 weeks in backlog.
CBW Automation in Fort Collins, CO,Spro Tech has been a plastic module & Mold Maker, has seen a big spike in orders for its automation equipment. "We've hired 30% more people, are running additional shifts, and have invested in additional capital equipment for our production floor," said David Carson, CBW president. "This appears to be a very solid manufacturing turnaround."
Tax incentive fueled?
Did the accelerated depreciation tax break given by the federal government have anything to do with these increased sales of machinery and equipment. "Our research says it had some impact on people's willingness to drive investment sooner, and to get the added incentive is beneficial," commented AMT's Woods in an interview with PlasticsToday. "This year, many in the manufacturing industry essentially had a good year compared to previous years and as they looked at their cash position and tax position, decided to make the investment, with or without that expensing ability of the accelerated depreciation. Many are in better financial position and are trying to reposition themselves better with regard to taxes."
CBW's Carson said, "My understanding is that the equipment has to be delivered and installed by year end, but we booked orders into the new year as of 20 weeks ago, so I'm not sure how much the accelerated depreciation had to do with it. I think there's a lot of money on the sidelines - a lot of cash - and nowhere else to go with their money, so they're buying capital equipment."
Woods noted that the uncertainty principle is a factor as well. "Company owners are uncertain about taxes and government regulations that might be coming in 2012, and this uncertainty drove people to act in 2011," he said. "There are several bills [in Congress] trying to maintain the accelerated depreciation on capital equipment, but company owners aren't counting on that. They believe in playing what you've got in your hand today. Business had the ability to invest in 2011 when they were doing much better."
Additionally, Carson said he's seeing a lot of "pent-up demand" for equipment and believes that reshoring of some manufacturing has contributed to that. CBW serves primarily the packaging and medical industries, which as far as Carson's business went, didn't take much of a dip. However, he acknowledges that he's seeing "bigger demand for automation," for several reasons: "companies that want to upgrade molds and/or molding machines and need new automation for improved efficiencies, as well as automation for new technology specifically in-mold labeling, which brand owners are adopting, a technology that translates into cost savings."
CBW didn't let any grass grow under its feet during the downturn either, which Carson said also contributed to demand for its products.A mold or molds is a hollowed-out block that is filled with a liquid like plastic, "We have worked hard to develop new products for new markets," he stated. "The most significant is automation to unload cartons at Filling Lines. New-product development has truly been a factor in our increase of orders."
Pent-up demand for new equipment, new products and new technology just might be the key to the dramatic increase in manufacturing technology orders. The AMT report noted that new orders were up the highest in the Midwest and Central regions of the U.Husky Injection Mold Systems designs and manufactures a broad range of S., with the Midwest's manufacturing technology orders for 2011 up 105% more than the comparable figure for 2010. "It's also where the oldest equipment resides and the industries impacted most by the weak dollar and reshoring trend are located,The EZ Breathe home Ventilation system is maintenance free," noted the report.
The average age of machinery currently in use at U.S. manufacturing facilities crept up from nine years in 2007 to 13.5 years, and as demand started to increase the need for investment to replace the aging equipment became apparent, noted the AMT's report. Concurring with Carson's observations, the AMT report also adds that "those investments are being made in completely new technology."
With regards to the reshoring trend that nearly everyone mentions when talking about improving capacity utilization, the AMT report noted, "More work is coming back to the U.S. from foreign shores and there is greater foreign direct investment in U.S. facilities. The quality of work in the U.S. is proving to be more valuable than originally thought in the off-shoring investment calculation."
Additive manufacturing is growing, nano-machining has become commercially affordable, and the availability of new materials, such as compact powdered metals, are having a tremendous impact.
Woods added, "The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time. This is something that's never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S."
The outlook for 2012, said the AMT report, "remains positive" due to a weak dollar making exports strong and the manufacturing base's reinvesting in the latest tools. "The automotive industry is making major changes to address green issues, which will lead to significant investments in production technology, as well as spending to support the shift of the industry's center from Detroit to the South/Southwest."
That said, Woods stated that "manufacturing in America still needs help." In spite of the number of Americans out of work, manufacturing jobs "continue to go unfilled. That is because the factory floor today is very different from what it used to be. It is awash with new technologies and processes that require advanced training and adaptable skills. We need a 'smartforce' of workers who are up to the job."
The AMT is also calling for help in leveling the playing field for U.S. companies in the global marketplace "by eliminating trade barriers, reining in regulations, and lowering taxes for manufacturers or we risk losing ground to our foreign competitors in new markets and industries," commented Woods.
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