Flash Manufacturing PMI, February 2023:  Although the flash estimate of the UK manufacturing PMI was still below the crucial 50 level, there was at least a significant improvement with the reading of 49.2 being the highest since last July (the last time a positive figure was recorded).  The good news is boosted because the output element of the PMI calculation moved into positive territory for the first time for nine months.  This is boosted by the fact that suppliers’ delivery times improved (and therefore have a negative impact on the index) at the fastest rate since June 2009.

The Euro-zone moved in the opposite direction with a slight worsening of the manufacturing PMI with a flash estimate of 48.5.  This came despite an increase in output – the first time that this element of the calculation has been in positive territory  for 9 months.  The report notes that the main weakness within manufacturing is in chemicals, plastics and basic materials, with the automotive and industrial goods sectors noted as leading the growth.  The improvement in output is linked to improved supply chains, although the fact that suppliers’ delivery times were shortening for the first time since January 2020 and to the greatest degree since May 2009, meant that the overall PMI reading edged down.

We only have separate reports for Germany and France at this stage, with the overall Euro-zone trends most clearly repeated in the former of these.  German manufacturing output grew for the first time in 9 months as supply chain problems eased significantly;  with new orders also still falling (led by export demand), albeit at a slower pace, the overall PMI fell to its lowest level for 3 months.  In France, manufacturing output fell and coupled with the downward contribution from improved suppliers’ delivery times, the overall flash PMI estimate fell back sharply to a 4-month low of 47.9 (France had been one of only a handful of countries to have a PMI reading above 50 in January).

Outside Europe, only Japan and the USA have flash PMI estimates.  The former saw the overall PMI fall to 47.4, the weakest reading since August 2020 in the recovery from the initial Covid outbreak;  this was driven by steeper falls in both orders and output with these two elements at their lowest level since July 2020.  For the USA, the pattern is different again with both the overall PMI and the output element improving to 4-month highs but remaining significantly below 50;  orders continue to fall sharply but employment growth accelerated in the manufacturing sector.

These reports are available on the “PMI by S&P Global” website at https://www.pmi.spglobal.com/Public/Release/PressReleases or on request from MTA.


USMTO and CTMR, December 2022:  The US Manufacturing Technology Orders (USMTO) programme tracks orders in the US market, based on the reports from participants.  Although the total for 2022 was -6% lower than the record-breaking value for 2021, this was still the 3rd best year ever recorded for machine tool orders in the USA market.

The AMT report suggests that this pattern is repeated in a number of key industries;  orders from machine shops were lower than in 2021 but still 23% ahead of the pre-pandemic figure for 2019;  agricultural machinery manufacturers also had lower orders than in 2021 but orders from these companies were still more than double the 2019 figure.  On the other hand, the aerospace industry which has seen machine tool orders grow both last year and the year before, is still short of its 2019 level, but this is expected to improve again in 2023.

The full regional breakdown for 2022 has been published and this shows growth in machine tool orders for only one region – business for the South-Central area rose by +10%, although it should be noted that this is the smallest of the six regions by value.  There was only a very marginal decline in orders in the South-East, where a sharp fall in metal forming machines just outweighed a +1% increase in orders for metal cutting machines.

Across the rest of the country, machine tool orders fell by -4% in the West, -6% in the North-Central-East (this is the largest region by value of orders), -9% in the North-East, with the North-Central-West region seeing the largest decline at -15%.

The US Cutting Tool Market Report (CTMR) tracks orders for tooling on a similar basis.  Although the total for December was slightly lower than November, this is not a surprise given the holiday season and it was nearly +15% higher than December 2021.  This continued a trend that started in April 2021 and meant that the total for 2022 was +10.8% higher than the previous year.  However, this still left the market total over 10% short of the most recent peak which was reached in 2018.

You can download the press releases for the two surveys from the AMT web-site at https://www.amtonline.org/topic/intelligence, with the CTMR release also published on the USCTI web-site at www.uscti.com (go to the News Releases tab);  alternatively, you can request either or both releases from MTA and we can make sure you get them when they are published each month.  We have attached a set of charts tracking the rolling 12-month totals from these two surveys which you can download below.


Japanese Metal Cutting Machine Tools Orders, 2022:  Our colleagues at the Japan Machine Tool Builders Association (JMTBA) also publishes monthly orders data – in this case it is for manufacturers rather than the market and they only cover metal cutting machine tools (there is a separate association in Japan for manufacturers of metal forming machines).

For 2022, this has recorded an increase of +14% compared to the 2021 total, with domestic orders growing slightly more rapidly (+18%) than export business (+12%).  As a result, the export ratio slipped to just under two-thirds although this remains at the historically high level that was first seen in 2020 during the pandemic.  Despite this growth, orders have not quite got back to the peak level that we saw in 2018.

This comes despite a fall in domestic orders in the 4th quarter of 2022 – these were -15% lower than in the 3rd period of the year and -13% down on the 3 months at the end of 2021.  On the same basis, export orders had quarter-on-quarter growth of +2% and were virtually unchanged compared to Q4-21.

The JMTBA report gives a breakdown of the domestic orders by industry.  The two largest in terms of the value of orders are industrial machinery and motor vehicles (which includes automotive parts) – in 2022, these accounted for 40% and 22% of total domestic metal cutting machine tools orders respectively;  Japan only has a small aerospace industry so this only accounted for 1% of domestic orders.

All but two of the industry categories saw an increase in domestic orders in 2022 – the exceptions were “other machinery & equipment” and “government, public agencies & schools”.  The fastest growth was recorded by the mould & die part of industrial machinery (+29%), closely followed by electrical machinery (+27%) and metal products (+26%).

Turning to the export business, the report provides a breakdown by region, including some key countries.  Deliveries to Asia were +8% higher than in 2021, although within this, East Asia (China, Korea & Taiwan which accounted for 80% of the value for exports to Asia) only grew by +5% with the rest of the region expanding by +21%.

Exports to Europe were up by +10% with the EU countries slightly outperforming the rest of the region with growth of +11%;  exports to the UK increased by +22% compared to 2021.  There was also a 22% increase in exports to North America – with more than 90% of this going to the USA this was the fastest growing market in this region with a rise of +24%.

Overall in 2022, exports to Asia accounted for 48% of Japanese exports of metal cutting machine tools;  North America took 30% and Europe 20%, with the balance spread across the rest of the world (South America, Oceania, Middle East and Africa).

You can access the JMTBA report at https://www.jmtba.or.jp/english/category/machine-tool-orders/ (February 2 2023) or we can send you the summary of the data – contact Geoff Noon at MTA (email:  [email protected]) if you want this analysis.

USMTO + CTMR Charts (Dec-22).pdf104.71 KB
JMTBA Orders Chart (Dec-22).pdf42.89 KB
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