Business Activity Higher for Shops Using Advanced Manufacturing Equipment

The Metalworking Business Index has registered consistent expansion in recent months, with shops that use advanced equipment like 5-axis reporting accelerating expansion, according to Michael Guckes, Chief Economist & Director of Analytics for Gardner Intelligence.

In recent months, the Gardner Intelligence Business Index: Metalworking, has reported consistent readings in the low 60s. Starting in 4Q2020, the Index crossed above the ‘50’ line. It then quickly surged to an all-time high of 63.7 in June. Between March and July of 2021, the Index has remained in a narrow range, generally indicating consistent month-to-month expansionary growth. Impressively, the pace of growth over the last five months has exceeded the peak expansion pace set during the best month of the prior business cycle back in 2018.

In order to assess the impact of technology on business activity, Gardner therefore provides an “advanced” version of the GBI which monitors business activity by manufacturing technology deployed. It is here that we see a significant difference between Gardner’s Metalworking Index, which measures overall activity in the metalworking space, and those employing specialized metalworking manufacturing operations.

In the year-to-July period — July marks the latest available data as of this publication — shops deploying advanced manufacturing techniques, and in particular five-axis and EDM operations, have reported an increasing acceleration of their business activity, besting the broader Metalworking Index’s performance. Guckes explains that the latest trends may signal that we will see a repeat in business cycle behavior from 2018. During that time, business activity expanded faster for shops deploying five-axis and micro-machining with readings in the mid-60s while overall metalworking activity scored in the low 60s. This difference in scores during 2018 indicated that a greater proportion of shops utilizing these operations experienced more upward momentum in new orders, production, hiring and/or backlog activity.

“Success in today’s world of manufacturing hinges on adapting your processes to be profitable for years to come, using new technologies and techniques that are secure and scalable for the long-term,” said Craig St. John, President of Matsuura USA.

“Manufacturing in North America continues to become more complex, requiring multi-axis machining solutions and with the pressure on pricing and margins, customers realize they must discover methods to reduce labor costs,” St. John explained.

Why is Matsuura busy while many other machine tool builders saw a 30% to 40% drop in business in 2020?

“The pandemic drove a shift in companies’ use of technology. Successful shops are implementing 5-sided machining and palletized solutions to reduce set-up time and gain unmanned machine time. This shift in how to make parts helps Matsuura since we have delivered these solutions for over 20 years, and have gotten good at it,” St. John explained.

“The skills gap is here to stay, technology is constantly progressing, and the competitive nature of manufacturing is growing on a national and global scale. Savvy Matsuura customers have learned how to improve product quality, machine utilization, and reduce unplanned downtime, all of which contribute to a future-proofed operation,” St. John concluded.

Looking for more economic insights? Gardner Intelligence, the economic arm of Modern Machine Shop’s parent company, provides industry insights as well as custom reports. Check out Gardner Intelligence’s resources.

Matsuura Machinery USA, Inc., located in St. Paul, MN is the U.S. subsidiary of Matsuura Machinery Corporation in Japan. Since 1935, Matsuura has been the forerunner in designing innovative technology and manufacturing solutions to a variety of industries around the globe. Matsuura Machinery USA, Inc. delivers unmatched excellence in 5-axis, vertical, horizontal, linear motor, multi-tasking CNC machine tools and machines with a powder bed metal AM platform with machining capability. Matsuura Machinery USA, Inc. provides the service, applications and technical field support that have always been the Matsuura standard for business.

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