Editorial: Winds of Change
Times change quickly. AMT-The Association for Manufacturing Technology and the American Machine Tool Distributors Association just reported that machine tool consumption in the United States is down 30.6 percent from the first quarter of 2000 to the first quarter of 2001. And new orders for North American robotics companies fell 36 percent in the first quarter of 2001 versus the first quarter of 2000, according to the Robotic Industries Association (RIA).
Even though the Labor Department says unemployment fell slightly to 4.4 percent at the end of May, manufacturers continue to feel the brunt of an economy that shows almost no growth, says the National Association of Manufacturers (NAM). The manufacturing sector remains weak and is continuing to work its way through a serious inventory correction that began last fall. Shaky economic growth, combined with an overvalued dollar and high energy prices, led companies to reduce payrolls by 124,000 in May, the NAM says.
By the time you read this, second quarter results will be out. But even if they show improvement, cause for concern remains. "The long string of productivity gains that fueled the recent economic expansion are not likely to resume until capital spending for manufacturing equipment picks up," warns Don F. Carlson, AMT president. "To return to the growth rates of the nineties, manufacturers need to exhibit the courage to invest in the latest technology to drive costs down and their competitiveness up."
Manufacturing is hardly on the way out. In fact, manufacturing hasn't declined in decades as a percentage of the gross national product. Its contribution to growth during the economic expansion has exceeded that of services. Growth in manufacturing productivity has outpaced that of the rest of the economy by increasingly wider margins each year since 1993.
Manufacturers are among the first to adopt new technology; they are innovators, and buyers of technology from robots to machine tools. The North American robotics industry posted its second-best year in 2000. It shipped more robots in 2000 than ever before, beating the record set in 1999 by 5 percent, according to Donald A. Vincent, RIA executive vice president. And even though the machine tool industry's first-quarter shipments have fallen by comparison with 2000, it is also the machine tool industry's continual product improvements that help U.S. manufacturers improve efficiency and reduce costs.
Take advantage of the technology you'll find on display in this ASSEMBLY Buyers Guide to introduce new products, expand your customer base and build market share. Make the winds of change be in your favor.