Machinery Industry: Growth, But No Economic Health

March 5, 2012
Healthy activity, and a trend toward buying higher-priced machines, has American machine tool distributors feeling pretty optimistic.

Machinery business in 2011 was up about 100 percent more than 2010—and as of mid-February, it was running about 80 percent more, says Peter A. Borden, president of the Rockville, Md.-based American Machine Tool Distributors’ Association (www.amtda.org)

Translated to units shipped—of, for example, cutting machines such as milling machines, lathes and saws, and forming machines such as presses, welding machines, etc.—that’s about 2,000 or more units shipped monthly, he says.

That’s healthy activity, says Borden, “and the trend now is for people to buy higher-priced machines.” Part of the higher unit costs includes added accessories, engineering services and automation, he adds.

Automation has become a big trend because the labor to run machines can’t be found and machines with automation are very productive, Borden says. “Manufacturers want the machines to run 16 to 24 hours per day,” he adds. But getting any machine to end users can have new challenges.

“If a company is a global manufacturer, they’re sending 30 percent to 50 percent of their machines to India and China. So lead time for receiving new machines has become an issue,” Borden remarks. “Lead times used to be one-to-three months, with a long delivery time being six months. But now the typical lead time is six to nine months, or even 12 months or longer.”

Currently, in part due to the cheap dollar, “the lights are pretty green” regarding exports, he says. Ongoing, regulatory issues undermine good times, he contends: “People aren’t hiring because of government regulations, including healthcare.”

The state of the economy also still concerns Borden and his association’s members. “In the back of our brains, we know the economy is not good. We’re expecting it to be flat for as long as the next 12 to 24 months,” he says.

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