Where have all the machines gone?

Could it really be true? Are we really seeing a shortage of industrial machinery? It appears that we are. A May 27 report in the Wall Street Journal noted that "after weathering the economic slump, many companies are facing a new headache as business starts to pick up: shortages of certain kinds of machine tools and other equipment they need to keep up with demand." The report went on to say that tight machine tool supplies are causing bottlenecks in production in many manufacturing plants.

According to the Assn. for Manufacturing Technology (AMT) and the American Machine Tool Distributors' Assn. (AMTDA), U.S. manufacturing technology consumption (orders for machine tools) for March totaled $258 million, up 58.1% from February, and up 49.5% from a year earlier.  The AMT and AMTDA report showed that 2010 Q1 YTD machine tool consumption totaled $548.53 million, up 33.7% compared with the same period in 2009.

The WSJ noted that Indianapolis-based Hurco Cos., which makes machine tools for the U.S. and European markets, was building just 30 new machines a month at its Taiwan factory last year. Now it is building about 100 per month. However, the WSJ noted that is well below the 200 per month it was making before the recession. Fanuc Robotics America has seen orders picking up for its factory automation equipment. However, noted its CEO Rick Schneider in a WSJ interview, "The biggest bottleneck was not putting the machines together but getting the components."

It seems that molding machinery is also in demand, but unfortunately, said several people I spoke with, not in new machinery. "Everyone wants used equipment, but much of the used molding equipment that was on the market has been picked over," said David Hausmann, owner of Elite Machinery Systems LLC in Strongsville, OH. Hausmann is low on used equipment and sent out a recent e-mail announcement for used molding machines. Hausmann said that he has more than 100 requests for newer, used injection molding machines that he needs to fill.

"We had 117 horizontal injection molding machines at one time, but now we have just 44 left. And only 15 verticals—about half of what we usually have," said Hausmann. He currently has requests for eight Cincinnati Roboshots (33-330 tons), and "any electric machines"—he needs 25 of them, late 1990s or newer.

He added that he's seeing capacities coming back among molders, but they still want to buy used. "Fifteen years ago people used to tell me they didn't want used machines, saying 'we only buy new.' That's how a lot of these guys got in trouble—buying new machines all the time. Now many of these same companies won't even look at new—they're begging and holding out for the used equipment. Things are turning."

There seem to be fewer auction flyers coming across my e-mail lately compared to the four or five each week that I received last year. That's true for injection molding machines, moldmakers, and machine shops. Maybe there's a tale of caution for molders in all of this, and that is as business comes back, don't be a glutton for more machinery. The one thing you can count on is change.