Through 2025, the value of manufacturing technology investments followed a relatively linear upward path, whereas the count of units ordered had a slightly choppier journey: January had the lowest order value of the year, while unit trends showed a modest slump from May to August. These divergent trends indicate that the heightened uncertainty following the April 2 tariff announcement may have delayed some orders, but that large, longer-term investments were undeterred by rising uncertainty and political noise.

While the May-August 2025 slump in units ordered was easily attributable to the heightened uncertainty of the time, it also extended a longer-running trend of loosening correlation between the number of machines ordered and their value, which began in the latter half of 2021. Instances of two data series deviating from a normally correlated path have cropped up so frequently in the analysis of economic data that a December 2025 New York Times article asked, “When did everything become K-shaped?” These bifurcated trends in machinery orders are largely due to increased demand for automation and divergent buying patterns across customer industries.

Orders from contract machine shops, the largest customer of manufacturing technology, grew 19.1% in 2025. This industry is a strong driver of unit growth, so its underperformance relative to the total market growth of 22.5% has contributed to the growing divergence between dollar value and unit trends. Conversely, the aerospace sector typically purchases high-value machinery that drives dollar-value growth without moving the needle on units as much as other customer industries. Growing factory shipments in 2025, along with ongoing capacity constraints, have led to 45.1% growth in manufacturing technology orders from aerospace manufacturers compared to 2024.

Investment in manufacturing technology from auto manufacturers has varied wildly over the last several years, after the industry made headline-grabbing forays into electric vehicle production and an equally publicized retreat that required further retooling of production lines. This change in response to consumer preferences led to a 22.2% increase in machinery investment in 2024. The fastest-growing industry in 2025 was commercial and service machinery, which grew 121.5% over 2024 levels. Among other equipment used throughout the service sector, this industry also manufactures inspection equipment heavily used in chip fabs.

The forces that propelled investment in manufacturing technology to new heights at the end of 2025 will continue to drive the market well into 2026, with single-digit annual growth expected. The race to build AI capacity is creating opportunities to further sales in the industries that support electricity generation and distribution. Amid a global decline in steel production, the United States stands as an outlier, with production increasing. Coupling this increase with strong investments in machinery by primary metal producers could point to further manufacturing capacity needs in the coming months and years. Machinery ordered in 2025 will begin to hit shop floors throughout the first quarter of 2026 and, combined with increased levels of industrial activity, are expected to push cutting tool consumption up nearly 5% in 2026.

Continued consumer demand and elevated investment in manufacturing technology lend credence to the Federal Reserve’s assertion that interest rates are approaching, if not at, the neutral rate as supply and demand forces in the economy move closer to alignment. If these factors persist as expected, a quite rationally exuberant manufacturing sector will convene in Chicago from Sept. 14 through 19, when IMTS – The International Manufacturing Technology Show opens.

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