Slow demand for metal-cutting equipment in recent years led to sharply reduced prices at this month's machining industry trade show, observers told The Wall Street Journal last week.
Scott Camloh of Indianapolis-based Hurco told the paper that the precision metal cutter maker, like others attending the annual International Manufacturing Technology Show in Chicago, needed to offer discounts, extended warranties and other perks "just to get in the door."
The report largely pinned the tough conditions on oil and natural gas prices that have remained low for more than two years. The energy sector is heavily intertwined with the metal industry, and low prices in the former prompted companies in the latter to hold off on high-tech equipment spending.
Low commodity prices also impacted manufacturers that serve the construction, mining and agriculture industries. The Association For Manufacturing Technology — which runs IMTS — reported that orders for cutting tools through July were off by nearly 10 percent compared to the first seven months of 2015.
Observers, however, added that the aerospace, auto, medical device and other sectors offered some reprieve from the sluggish conditions. AMT suggested that advancements in the auto industry, in particular, would spark a rebound in orders next year.
IMTS attendees also signaled that manufacturers were on the hunt for new customers — even if they planned to make purchases several months from now — and AMT noted that this year's show set a record for exhibitors.
Camloh, meanwhile, told the Journal that his company set a record for sales during the first half of IMTS' six-day run.