The most current U.S. manufacturing technology orders put the year-to-date total at more than $4,5 million, which is up 80.5 percent compared with 2010 and is the second highest dollar amount in the last 15 years, according to a year-end report from The Association for Manufacturing Technology (AMT) and The American Machine Tool Distributors’ Association (AMTDA). As of October, manufacturing technology orders had already surpassed the total value accumulated in 2007.

Regional Growth
The Midwest and Central regions of the United States have seen the greatest surge in manufacturing technology orders. The Midwest’s manufacturing technology orders in 2011 are 105 percent more than the comparable figure for 2010. This large increase is the result of the region’s large traditional customer base, according to the industry associations. It is also where the oldest equipment resides and the industries impacted most by the weak dollar and re-shoring trend are located.

The Central region pick-up — 85 percent higher compared to 2010 — was powered by the growth in the energy business and secondly by the automotive industry.

Beyond manufacturing technology, overall U.S. manufacturing is robust, according to AMT and AMTDA. Despite the past several years’ trend of off-shoring, the value of U.S. manufacturing output increased by one-third to $1.65 trillion between 1972 and the 2008 recession. Even though China accounted for 19.8 percent of global manufacturing value in 2010, the U.S. was strong with a share of 19.4 percent.

“The factors that are fueling this tremendous surge are the traditional reasons that drive growth in investment, but what is unusual about the current rebound is that all factors have come together at one time,” said Douglas K. Woods, president of AMT, in a prepared statement. “This is something that’s never been seen before and as a result we are seeing a true renaissance for manufacturing in the U.S.

“American manufacturers rushed to beat the end-of-year bonus depreciation deadline. Inventories were low – something we’ve never experienced going into a recession – and that accounts for the quick rebound,” he said. ??Exports are rising as American manufacturers meet overseas demand. Manufacturing technology from the U.S. is less expensive than foreign equipment, and U.S.-made goods are more price-competitive than many imports due to the weak dollar.

Investment in New Technology
The average age of machinery currently in use at U.S. manufacturing facilities crept up from nine years in 2007 to 13.5 years, and as demand started to increase the need for investment to replace the aging equipment became apparent. Those investments are being made in completely new technology, says the industry associations. Multi-operation machines are profoundly impacting productivity. Water-jet cutting and hydroforming are experiencing massive growth because they offer all the benefits of traditional processes but eliminate distortion and deformation. Additive manufacturing is growing, nano-machining has become commercially affordable, and the availability of new materials, such as compact powdered metals, is having a tremendous impact. Plus, the emergence of cloud manufacturing, which promotes collaborative efforts across organizations, is opening new doors to manufacturers.

Expanding Markets
Expanding markets worldwide are playing an important role as manufacturing grows. China accounts for almost one-half of the world’s total consumption of manufacturing technology. India’s economy is growing at double the Western economy’s rate, with expectations for more China-like development soon. As it prepares for major world events including the Olympics and the FIFA World Cup competition, South America faces the challenge of building infrastructure that can support the events. Russia, South Africa, the Middle East, and South Asia are on the fringe, but nevertheless contribute to growth in the global manufacturing economy.

Another factor boosting U.S. manufacturing is the re-shoring phenomenon. More work is coming back to the U.S. from foreign shores and there is greater foreign direct investment in U.S. facilities. The quality of work in the U.S. is proving to be more valuable than originally thought in the off-shoring investment calculation. Companies face increasing costs in logistics issues with the delivery of components and the exporting of completed products to North America. Add to that the rapidly increasing labor costs in traditionally “low-cost” labor markets, and the continued decline of labor in the overall share of total production cost, and the re-shoring picture becomes clear.

“When the total cost of manufacturing is calculated, the U.S. is a very favorable environment,” Woods said. “In fact, new research from the Boston Consulting Group (BCG) shows that transportation goods such as vehicles and auto parts, construction equipment, appliances, electrical equipment, and furniture are among the sectors that could create up to three million jobs as a result of manufacturing returning to the U.S.”

2012 Outlook
The industry associations report the outlook for 2012 remains positive. The weak dollar is making exports strong. Re-shoring is in full bloom. The manufacturing base is reinvesting in the latest tools and energy will continue to be a large investor in manufacturing technology. The automotive industry is making major changes to address green issues, which will lead to significant investments in production technology, as well as spending to support the shift of the industry’s center from Detroit to the South/Southwest. Aerospace green field investments will continue in the Southeast and West.

“This all said, manufacturing in America still needs help,” Woods said. “Jobs are an unresolved issue. Despite the high number of Americans out of work, manufacturing jobs continue to go unfilled. That is because the factory floor today is very different from what it used to be. It is awash with new technologies and processes that require advanced training and adaptable skills. We need a “smartforce” of workers who are up to the job.”