Sometimes a statistic is, to paraphrase the old saying, a damned lie.
Take the latest figures on machine-tool consumption. In February, Midwest companies ordered $160.3 million worth of machine tools–down 1.8 percent from January and a whopping plunge of 20.5 percent from February 1997. Every other region of the U.S. saw orders increase in February compared with both prior periods.
A sign of an economic downturn? An indication that the Midwest is burning out while the rest of the country zooms ahead?
Quite the contrary, says Robert Gardner of the Association for Manufacturing Technology. The organization compiles the figures in conjunction with the American Machine Tool Distributors’ Association. Don’t look at the percentages, he advises; look at the real numbers.
In February, orders in the Midwest were worth $160.3 million, more than 28 percent of the national total of $567.9 million. The Midwest region includes Illinois, Indiana, Wisconsin, Michigan and Ohio.
Western states accounted for $118.2 million in orders, or 20.8 percent of the total; central states, $121.2 million, 21.3 percent; Northeast, $97.1 million, 17.1 percent; and the South, $71.1 million, 12.5 percent.
In January, the Midwest accounted for more than 40 percent of the nation’s total machine-tool orders, the two associations noted.
“The bulk of the manufacturing–and this is consistent from month to month–has been in the Midwest,” Gardner said. “The Midwest is the strongest region and has been doing well all along. The other ones have grown considerably in the last month because they were so much farther down.”
Nationally and in the Midwest, machine-tool orders have been growing consistently over the past six years, he said. And equally consistently, the Midwest has been No. 1 in dollar terms, he added.
Gardner is optimistic that the overall trend will continue to be positive for the rest of this year, despite some concerns that the economy is likely to cool a bit.
“The experts every year continue to forecast that the good times are going to come to an end, and we’re simply going to have stability and modest growth. Then manufacturers continue to order new equipment, so our member sales continue to increase.”
He speculated that pressures of international competition force manufacturers to continually upgrade equipment to improve productivity.
Recent reports from the Conference Board, the National Association of Purchasing Management and Commerce Department all suggest that the U.S. economy will grow nicely this year, despite worries about fallout from Asian financial troubles, with manufacturing particularly strong.
