Orders for manufacturing technology, as measured by the U.S. Manufacturing Technology Orders Report published by AMT - The Association For Manufacturing Technology, amounted to a total of $357.3 million in January 2025, a decrease of 29.8% compared to December, but an increase of 5.7% compared to January 2024. Compared to an average January, the value of orders in January 2025 was 16.2% higher, making it the highest January since 2022. However, the number of units was 12.2% lower than in an average January - the lowest figure for a January since 2016.
Orders from the contract manufacturing sector, the largest consumer industry, lagged behind market development for much of 2024 but picked up in the last four months of the year. This momentum did not carry into 2025, as orders from machine manufacturing companies fell by almost a third in January compared to December. While the monthly decline was the largest in a period from December to January since 2020, the year-on-year decline from January 2024 was only half as large as the decline between January 2023 and 2024.
Orders in the aerospace industry reached their lowest level in January since the start of the machinists' strike at Boeing in September 2024, at almost half the level of December 2024. Despite the decline, orders increased by 11% compared to January 2024, and production rose, indicating potential for future demand. While the aerospace sector increased its production in January 2025, overall manufacturing output slightly decreased as the production of motor vehicles and motor vehicle parts fell sharply. In this environment of declining production, automakers reduced their orders in January 2025 by almost two-thirds below the level of December 2024. While most consumer industries recorded declines compared to the previous month, orders from medical technology manufacturers in January 2025 rose to the highest level since September 2023, underscoring the growing importance of the sector as a consumer of manufacturing technology.
After the shallow downturn of the last two years, order activity - measured both in value and in units - seems to have reached a low point. During the recovery after the downturn in manufacturing in 2015 and 2016, the market expanded for 31 months from its low point to the next peak, resulting in a cumulative order increase of 42%. So far, industrial production in 2025 has stagnated, with capacity utilization slightly declining in January after rising in the last two months of 2024. If the data from February 2025 shows increasing capacity utilization, we can expect that order activity will gain momentum by the end of the first quarter of 2025.
While the possibility of a strong start to 2025 remains in sight and rising utilization rates generally indicate an impending increase in order activity, Oxford Economics has recently slightly revised its global growth forecast downward. They cited increasing uncertainty in global trade leading to hesitation in investment decisions. Although we see the ingredients for an impressive recovery ahead of us, the actual outcome could be as flat as the table they are sitting at.
Source: AMT (The Association For Manufacturing Technology)
