At long last, the economy is finally gaining momentum.

The unemployment rate, which began the year at 8.3 percent, stood at 7.9 percent in October, according to the U.S. Bureau of Labor Statistics (BLS). Employment growth has averaged 157,000 jobs per month thus far in 2012, a bit more than the average monthly gain of 153,000 in 2011.

Through the first 10 months of 2012, North American light vehicle and truck production totaled 13.1 million units, an increase of 20 percent compared with the first 10 months of 2011. What’s more, industry experts predict North American production could hit 15 million units in 2013.

In September, orders for long-lasting manufactured goods posted their largest gain in nearly three years. Orders for durable goods, such as televisions and cars, increased by 9.9 percent to a seasonally adjusted $218.2 billion, according to the Commerce Department. The big gain was driven by a surge in airplane orders. Excluding transportation equipment, September orders were still up a solid 2 percent.

The Commerce Department also reported that housing starts surged 15 percent in September to the highest level in four years. Buoyed by record-low interest rates, an improving job market, and population growth, new home construction jumped to an 872,000 annual rate, the fastest pace since July 2008 and exceeding all forecasts. In addition, the National Association of Home Builders/Wells Fargo builder sentiment index increased to 41 in October, the highest since June 2006 and the sixth-straight monthly gain.

With the economy improving, companies increased their investments in manufacturing technology this year. For example, U.S. sales of machine tools totaled $667.5 million in September, according to AMT—The Association for Manufacturing Technology. That’s an increase of 41 percent compared with August sales and 13 percent compared with sales in September 2011. Machine tool sales totaled $4.3 billion for the first nine months of 2012, up 6 percent compared with 2011.

“In the 17 years that this data has been collected, there is only one other month that broke $600 million,” says Douglas K. Woods, AMT president. “It’s possible we could average $450 million a month for all of 2012—the largest year ever for [our survey].”

All this would seem to bode well for the coming year, and the results of our 17th annual capital equipment spending survey indicate that manufacturers will boost spending on assembly technology in 2013.

Specifically, U.S. assembly plants will spend $2.86 billion on new equipment in 2013, an increase of 19 percent from the $2.4 billion projected to be spent in 2012.

Some 30 percent of respondents will spend more on assembly technology next year than they did this year, and 44 percent will spend the same as they did in 2012. Only 26 percent of respondents will spend less in 2013 than they did 2012.

Of those facilities that will boost spending from 2012 to 2013, the average expected increase is a robust $789,100. Of those facilities that will reduce spending from 2012 to 2013, the average expected decrease is $380,639.

On average, manufacturers will spend $630,360 on assembly technology in 2013. That compares with $476,123 in 2012, and it marks the first time since 2011 that the average capital equipment budget has exceeded $630,000.

Aggregate budget data indicate that spending will be no worse than it was in 2012. For example, the percentage of plants that will spend at least $1 million on assembly technology has held rock-steady at 11 percent from 2011 to 2013. Similarly, on the low end of the spending spectrum, 47 percent of plants will spend less than $50,000 in 2013. That’s virtually the same as the 45 percent that spent as much in 2012 or the 49 percent in 2011.

It’s in the midrange where real growth can be seen. In 2013, 21 percent of assemblers will spend between $100,000 and $250,000 on capital equipment. That compares with 18 percent in 2012 and 15 percent in 2011.

There’s certainly money available to spend. According to financial services firm JPMorgan, corporate cash balances have swelled by 14 percent and are on track toward $1.5 trillion for the Standard & Poor’s 500. Both figures would be historic highs. And, with the election over, manufacturers appear ready to put that money to work, now that some uncertainty has been taken out of the economic equation.

It’s a good thing, too, because assemblers spent most of what they wanted to this year. Indeed, 55 percent of respondents spent at least 70 percent of their proposed capital budgets for the year. That’s the highest percentage since 2008 and a dramatic reversal from the past few years, when less than half of our respondents spent 70 percent or more of their budgets.

On average, assemblers spent 63 percent of their 2012 budgets. That’s the same decent percentage as last year, but it’s still less than the average of 67 percent in 2008 or 79 percent in 2002.

Manufacturers will need new assembly technology, too, because they’re not adding much help. The average number of employees at responding plants this year is 200. That’s better than last year’s average of 161, but it’s well below historic averages for our survey. In fact, 70 percent of respondents to this year’s survey employ less than 100 workers. That’s an all-time high for our survey.

Regardless of how much they spend on capital equipment next year, assemblers continue to expect a quick return on investment (ROI). Next year, only 33 percent of plants have an ROI period of at least two years. It’s the third straight year in which that percentage has been below 35 percent.

Spending Motives

Replacing old equipment continues to be a priority for ASSEMBLY’s readers. Some 42 percent of U.S. assembly plants will be replacing worn-out machinery next year. It’s the second straight year that ratio has been over 40 percent.

As it has been for 15 of the past 17 years, cost reduction is the No. 1 reason for investing in assembly technology. Forty-five percent of plants will be getting equipment next year to cut costs—virtually the same ratio as in 2012.

If there’s any cause for alarm in this year’s data, it’s this: Just 29 percent of plants will buy equipment next year to assemble a new product. That compares with

37 percent in 2012, and it’s an all-time low for our survey.

After several years of improvement, the injury rate in manufacturing has plateaued. From 2009 to 2011, the rate of nonfatal workplace injuries in manufacturing has held at 4.4 per 100 full-time workers, according to BLS statistics. Perhaps that’s why a growing number of manufacturing managers are buying equipment to make their workplaces safer. Some 21 percent of plants will get equipment to improve safety or ergonomics next year. That compares with 18 percent in 2012, and it’s only the second time in five years that that ratio has been above 20 percent.

For the third straight year, the top two targets for cost reduction are direct labor (76 percent) and indirect labor (39 percent).

With prices rising for metal and plastic, a growing number of assemblers are concerned over the cost of materials. Some 25 percent of assembly plants are looking to lower their material costs next year, the highest percentage since 2010.

Assemblers appear to have warranty costs well under control. Just 11 percent of plants need to lower their warranty costs next year. That compares with 16 percent in 2012 and 24 percent in 2011. In fact, that percentage hasn’t been so low since the first year of our survey.

Other costs being targeted by assemblers include:

What Assemblers Want

Many assemblers came through the latest recession bruised and battered, but alive and ready to compete. Others were not so lucky. Like it or not, there’s a trove of quality used equipment out there from manufacturers that went belly up in recent years, and the survivors appear eager to snap up the bargains.

Next year, manufacturers will meet, on average, 40 percent of their assembly technology needs with used or rebuilt equipment. That compares with 31 percent just five years ago, and it’s the highest percentage in the history of our survey.

For the first time since 2007, computers and software top assemblers’ wish lists. Sixty-two percent of plants will invest in hardware and software for statistical process control, enterprise resource planning and CAD. That compares with 56 percent in 2012, and it’s a record high for our survey.

On average, assemblers will devote 14 percent of their capital budgets to computers and software next year. That compares with 10 percent in 2012, and it’s an all-time high for this technology category. All totaled, assemblers will spend $212 million computers and software next year, a 36 percent improvement over 2012.

Single-station assembly machines—assembly presses, automatic screwdriving systems and automatic riveting systems—are next on the list. Some 54 percent of assembly plants will buy such equipment next year, up from 41 percent in 2012. All totaled, assemblers will spend $331 million on single-station assembly machines next year, 32 percent more than they spent on that technology in 2012.

Fewer plants will be purchasing power tools next year. Fifty-two percent of assemblers will acquire handheld screwdrivers, nutrunners and riveters next year, the smallest percentage since 2007.

On the plus-side, however, those that are buying electric and pneumatic hand tools will spend more on them. On average, assemblers will dedicate 10 percent of their 2013 budgets to electric and pneumatic tools. That compares with 9 percent in 2012, and it’s the largest percentage since 2010. All totaled, assemblers will spend $156 million on tools next year, 16 percent more than in 2011.

The biggest increase in spending will be on motion control technology. Although the average budget allocation for motion control won’t change—2 percent—more plants will be investing in the technology. Fourteen percent of respondents plan to buy motors, slides, bearings, drives and controllers next year, up from 12 percent in 2012. All totaled, assemblers will increase spending on motion control technology by 50 percent, from $47.9 million in 2012 to $72 million in 2013.
Inspection equipment continues to be a hot technology. Forty-eight percent of respondents—a record high—will buy vision systems, sensors, microscopes and other technologies for inspecting parts and assemblies next year. On average, assemblers will allocate 7 percent of their 2013 budgets to inspection equipment, which is also a record high. All totaled, assemblers will spend $214.2 million on inspection technology, 42 percent more than they spent in 2012.

That projection dovetails with current market trends for inpsection technology. For example, total sales of machine vision systems in North America rose 3 percent in the second quarter of 2012, compared to the second quarter of 2011, according to the latest statistics from the Automated Imaging Association.

One technology that will “come around” next year is conveyors and material handling. Twenty-two percent of plants will invest in pallet-transfer conveyors, flow racks, automated guided vehicles and other material handling equipment next year, up from 19 percent in 2012. The average budget allocation for conveyors is also up, from 2 percent in 2012 to 4 percent in 2013.

All totaled, assemblers will spend $75 million on conveyors and material handling next year, a 36 percent increase over 2012 spending.

The only technology that will see a decrease in spending next year is electronics assembly equipment. Just 11 percent of respondents will buy stencil printers, pick-and-place machines, reflow ovens and other electronics assembly gear next year. That compares with 13 percent in 2012, and it’s a record low.

On average, assemblers will devote 2 percent of their budgets to electronics assembly equipment. That’s half the 2012 average, and it’s also a record low.
The slump in electronics assembly equipment sales fits with the overall state of the industry. According to the IPC—Association Connecting Electronics Industries, North American shipments of rigid circuit boards and flexible circuits were down 7 percent in September 2012 compared with September 2011. Year to date, total shipments were down 5 percent.

Size Matters

Having taken it on the chin in recent years, small and midsized companies now seem poised to take advantage of market opportunities.

In 2012, companies with between 101 and 200 employees accounted for 14 percent of total spending. In 2013, these companies will represent 20 percent of total spending.

Some 39 percent of companies with 101 to 200 workers will spend more on assembly technology next year than they did this year. That compares with 27 percent for companies with more than 200 employees and 30 percent for the nation as a whole.

On average, companies with 101 to 200 workers will spend $411,062 on assembly technology in 2013—31 percent more than their average in 2012.

All totaled, companies with 101 to 200 workers will lay out $571.4 million on capital equipment next year, a 70 percent increase from 2012.

The story is much the same for small companies. In 2012, companies with fewer than 100 employees accounted for 13 percent of total spending. Next year, they’ll represent 20 percent. Of all the plants with million-dollar budgets in 2013, 20 percent have less than 100 employees. That’s the highest figure for that group since 2008.

On average, companies with 21 to 100 workers will spend $258,210 on assembly technology in 2013—twice their 2012 average. Companies with 20 employees or less will spend, on average, a meager $38,806. All totaled, companies with less than 100 workers will lay out $571.4 million on capital equipment next year, an 83 percent increase from 2012.

In contrast with small and midsized manufacturers, the nation’s largest manufacturers will likely hold the line on spending next year. Indeed, 60 percent of companies with more than 200 employees expect to spend about the same in 2013 as they did in 2012. That compares with 37 percent for plants with 101 to 200 employees and 44 percent for all U.S. facilities.

On average, companies with more than 200 workers will spend $1,993,761 on assembly technology in 2013, or 53 percent more than the 2012 average.

However, the median budget figure is down, from $375,000 in 2012 to $300,000 in 2013. That marks the end of a two-year streak in which the median budget figure for this group had increased.

Of course, companies with more than 200 workers will still account for the vast majority of capital spending next year. All totaled, our biggest assemblers will spend $1.71 billion on capital equipment in 2013, down 2 percent from the $1.74 billion they spent in 2012.

Compared with their smaller rivals, our largest manufacturers are much more likely to be investing in equipment to:

• in-crease capacity (50 percent vs. 30 percent for plants with fewer than 100 employees)
• assemble a new product (38 percent vs. 26 percent for plants with fewer than 100 employees)
• or to improve product quality (21 percent vs. 12 percent for plants with fewer than 100 employees)

In fact, those disparities have held true for the past three years.

On the other hand, manufacturers with fewer than 100 workers are more likely to buy technology to replace old or worn-out equipment (48 percent vs. 31 percent for plants with more than 200 employees) or to reduce costs (44 percent vs. 41 percent for plants with more than 200 employees).

Smaller manufacturers are also more patient than big companies. Thirty-four percent of plants with fewer than 100 workers can afford an ROI of two years or more. Only 26 percent of plants with more than 200 employees can afford to wait that long.

Given their deeper pockets, large plants are more likely to purchase new equipment than smaller ones. On average, plants with more than 200 employees meet 69 percent of their assembly system needs with new equipment. That compares with 49 percent for plants with fewer than 20 workers and 60 percent for all U.S. plants. That difference has held true for the past three years.

Large plants are also more likely to have automated assembly systems. Compared with all U.S. factories, plants with more than 200 employees are twice as likely to use fixed automation to assemble products and 1.5 times more likely to use programmable automation.

Transportation Equipment

The past year has been a banner year for manufacturers of transportation equipment (NAIC 336). In just the past few months, Ford announced plans to invest $135 million in a U.S. research center to develop batteries and other components for hybrid-electric vehicles. GM said it would spend $35 million to produce the Cadillac ELR, an extended-range electric vehicle, at its Detroit-Hamtramck assembly plant. And Chrysler announced plans to invest $240 million and create 1,250 jobs in Southeast Michigan, adding a third crew at its truck assembly plant in Warren and bringing an engine plant in Detroit back on line.

And yet amazingly enough, for the first time since 2007, transportation equipment manufacturers will not spend more on assembly technology than any other industry. Manufacturers of cars, planes, motorcycles, trucks, boats and missiles will account for 24 percent of total spending in 2013—the smallest share for this industry since 2010.

That’s not to say spending in this industry won’t be considerable. Indeed, transportation equipment manufacturers will spend, on average, $2.4 million on assembly technology next year. That’s nearly four times the national average, and it’s the highest average for this industry since 2002.

In fact, 23 percent of all assembly plants with million-dollar budgets are transportation equipment manufacturers.

All totaled, transportation equipment manufacturers will spend $685.7 million on assembly technology in 2013. That’s 14 percent more than the industry spent in 2012, and it’s the fourth straight year of capital spending growth.

Half the plants in this industry (49 percent) will spend more next year than they did in 2012—the highest such percentage of any industry and a record high for NAIC 336. Only 17 percent expect to spend less next year.

This industry continues to introduce new products. Thirty-eight percent of the plants in NAIC 336 are buying equipment next year to assemble a new product. That compares with 29 percent for all industries, and it marks the seventh consecutive year that this percentage has been above the national figure.

“Lean” continues to be a mantra in this industry. Some 31 percent of plants in NAIC 336 are getting equipment next year to implement lean manufacturing. That’s the highest percentage of any industry, and it’s the second straight year that the industry has held that distinction.

Safety is another concern among transportation equipment manufacturers. Twenty-nine percent of plants are buying equipment to improve safety or ergonomics next year. That’s more than any other industry, and it’s the second straight year that the industry has led the nation in safety-conscious plants.

Compared with other industries, manufacturers of transportation equipment are more concerned about the cost of scrap (38 percent vs. 28 percent for all plants) and warranty claims (15 percent vs. 11 percent for all plants), but less concerned about the cost of indirect labor (28 percent vs. 39 percent for all plants) or materials (9 percent vs. 25 percent for all plants).

As for assembly technology, manufacturers of transportation equipment are more likely to buy dispensing equipment (27 percent vs. 22 percent for all plants), multistation automated assembly systems (23 percent vs. 15 percent for all plants), assembly presses (29 percent vs. 22 percent for all plants), robots (27 percent vs. 11 percent for all plants), power tools (70 percent vs. 52 percent for all plants), and welding equipment (41 percent vs. 33 percent for all plants).

Machinery Manufacturing

In March, Deere and Co. said it will invest $70 million to expand capacity at its farm tractor assembly plant in Waterloo, IA. Seven months later, Deere-Hiatchi announced that it will spend $97 million to expand its tractor assembly plant in Kernersville, NC, creating 340 new jobs. 

That sort of investment should continue in the coming year. For the first time since 2003, machinery manufacturers (NAIC 333) will spend more on assembly technology than any other industry. Assemblers of lawn tractors, printing presses, photocopiers, pizza ovens, elevators and turbines will account for 31 percent of total spending next year, up from 10 percent in 2012.

In terms of dollars, the industry will spend $885.7 million on assembly technology in 2013, more than three times what it spent this year.
Twelve percent of plants will spend at least $1 million next year, which is down from 20 percent in 2012. However, 18 percent of plants will spend between $250,000 and $1 million in 2013. That compares with 4 percent in 2012, and it’s the highest percentage since the boom year of 2001. Only 70 percent of plants will spend less than $250,000, which is down from 75 percent in 2012.

On average, assemblers in this industry will spend $523,382 on assembly technology next year, which is down from the 2012 average of $837,250. However, the median budget is $100,000 for 2013, which is up from the 2012 median of $30,000.

Only 18 percent of manufacturers in NAIC 333 will spend less on assembly technology next year than they did this year. That compares with 22 percent in last year’s survey and 26 percent for the nation as a whole.

One reason for the added investment is the industry needs to add capacity. Almost half (48 percent) of plants are investing in equipment to increase capacity next year. That compares with 35 percent for all U.S. plants, and it’s the third straight year that NAIC 333 has exceeded the percentage for the nation as a whole.
Labor costs are a concern in the industry. Eighty-four percent of plants are concerned about the cost of direct labor. That’s the highest percentage of any industry, and it’s the second time in five years that NAIC 333 has held that distinction.

Compared with other industries, manufacturers in NAIC 333 are more likely to buy multistation automated assembly systems (18 percent vs. 15 percent for all plants), assembly presses (24 percent vs. 22 percent for all plants), parts feeders (22 percent vs. 19 percent for all plants), conveyors (26 percent vs. 22 percent for all plants), power tools (55 percent vs. 52 percent for all plants), and test equipment (44 percent vs. 42 percent for all plants).

Computers and Electronics

In October, electronics manufacturer Lenovo announced plans to begin assembling tablet, notebook and desktop computers at its warehouse in Greensboro, NC. The company will hire 115 employees.

Alas, such news will be rare next year. Compared with the outlook for machinery and transportation equipment manufacturing, the forecast for computer and electronics manufacturing (NAIC 334) is less rosy. Indeed, assemblers of clocks, disk drives, telephones, radar equipment, thermostats, microchips and other electronic devices will account for just 8 percent of total spending next year, an all-time low percentage.

An astounding 41 percent of manufacturers in this industry expect to spend less on assembly technology next year than they did this year. That’s a record high for NAIC 334. Not even in the recession years of 2009 and 2010 did that percentage even come close to that level.

All totaled, equipment spending in NAIC 334 will decrease 55 percent, from $503.2 million in 2012 to $228.6 million in 2013. Just 6 percent of plants in this industry will spend more than $1 million on assembly technology next year, compared with 13 percent in 2012. Only 10 percent will spend between $250,000 and $1 million. In 2012, that figure was 16 percent.

On average, plants in NAIC 334 will spend $790,136 in 2013, up from $555,690 in 2012. However, the median budget figure is just $45,000, down from $100,000 in 2012. Only 7 percent of all plants with seven-figure equipment budgets are in this industry.

Why the decrease? The industry may simply have too much capacity. Only 27 percent of plants will invest in equipment next year to boost capacity. That’s the lowest percentage of any industry, and it marks the seventh time in the past 10 years that the industry has been below the national norm.

Compared with other industries, manufacturers of computers and electronic devices are more concerned about the cost of scrap (35 percent vs. 28 percent for all plants), materials (31 percent vs. 25 percent for all plants), indirect labor (53 percent vs. 39 percent for all plants), and warranty costs (31 percent vs. 25 percent for all plants). They’re less concerned about the cost of direct labor (66 percent vs. 78 percent for all plants) or WIP (13 percent vs. 18 percent for all plants).

Not surprisingly, manufacturers in NAIC 334 lead all other industries in purchasing electronics assembly equipment. Thirty-seven percent will do so next year, compared with 11 percent for the nation as a whole. In addition, manufacturers in NAIC 334 are more likely to buy automatic screwdriving equipment (29 percent vs. 18 percent for all plants), automatic identification equipment (44 percent vs. 32 percent for all plants), computers and software (74 percent vs. 62 percent for all plants), test equipment (71 percent vs. 42 percent for all plants), and workstations (53 percent vs. 40 percent for all plants).

Fabricated Metal Products

In May, Liberty Safe, a manufacturer of gun storage safes, completed testing of a new $10 million fully computerized assembly line in Payson, UT. The line will double the company’s output to more than 700 safes a day.

Will the fabricated metal products industry (NAIC 332) continue to see such grand investment next year? Maybe.

Budget data present a conflicting picture. Eleven percent of plants in the industry will spend more than $1 million on assembly technology next year. That’s up from 4 percent in 2012, and it’s the largest percentage since 2009. So far, so good. But, 5 percent of plants will spend between $250,000 and $1 million. That compares with 8 percent in 2012, and it’s a record low.

The average budget will go from $167,810 in 2012 to $328,858 in 2013, but the median budget figure falls from $30,000 in 2012 to a record low $20,000 in 2013.
As a group, manufacturers of windows, cans, springs, bearings, guns and other products will spend $200 million on capital equipment in 2013, or 44 percent less than they spent in 2012. The industry will account for 7 percent of total spending, its lowest share since 1998.

One reason for the lack of spending might be that the industry just doesn’t have any new products to make. Only 26 percent of plants in this industry are investing in equipment to make a new product. That compares with 29 percent for all U.S. plants, and it’s the fifth time in six years that NAIC 332 has been below the national norm.

Like the electronics industry, NAIC 332 may also be dealing with overcapacity. Only 30 percent of plants in this industry are looking to increase capacity next year. That compares with 35 percent for all U.S. plants, and it’s the third straight year that NAIC 332 has fallen below the national norm.

Compared with other industries, manufacturers of fabricated metal products are less concerned about the cost of scrap (20 percent vs. 28 percent for all plants), WIP (11 percent vs. 18 percent for all plants) and warranty claims (6 percent vs. 11 percent for all plants) than they are about materials (30 percent vs. 25 percent for all plants).

Compared with other industries, manufacturers in NAIC 332 are more likely to buy parts feeders (21 percent vs. 19 percent for all plants), welding, brazing and soldering equipment (35 percent vs. 33 percent for all plants), and tooling (61 percent vs. 54 percent for all plants).

Electrical Equipment and Appliances

Overall, 2012 was a good year for manufacturers of electrical equipment and appliances (NAIC 335). GE revived its legendary Appliance Park manufacturing campus in Louisville, KY. Electrolux neared completion of a new assembly plant in Memphis, TN. And Whirlpool Corp. hired 150 workers at its dryer assembly plant in Marion, OH.

The revival of the housing market could be just the stimulus the industry needs to continue to invest in new facilities and equipment next year. Only 20 percent of plants in the industry will spend less next year than they did this year, and 53 percent will spend about the same.

On average, assemblers of lamps, refrigerators, mixers and other electrical products will spend $197,240 on capital equipment in 2013, which is not quite as much as the $356,578 spent in 2012. However, the median budget figure is higher, from $100,000 in 2012 to $135,000 in 2013. That’s the highest figure since 2001.

All totaled, the industry will spend $657.1 million on assembly technology next year, 44 percent more than what it spent in 2012. That gives NAIC 335 a 23 percent share of total spending, the industry’s biggest slice since 2004.

New products are the key to growth in this industry, so it’s no surprise that 46 percent of manufacturers in NAIC 335 are buying equipment to assemble something new. That’s the highest percentage of any industry, and it’s the 15th time in 17 years that the industry has been above the national norm for new product development.

Quality control is a nagging concern in this industry. Twenty-three percent of assemblers in NAIC 335 will buy equipment next year to meet more stringent quality standards. That contrasts with 15 percent for all U.S. plants, and it’s the eighth time in 10 years that this industry has led all others in that regard.

Compared with other industries, manufacturers in NAIC 335 are more likely to buy dispensing equipment (32 percent vs. 22 percent for all plants), automatic screwdrivers (27 percent vs. 18 percent for all plants), auto ID equipment (44 percent vs. 32 percent for all plants), computers and software (87 percent vs. 62 percent for all plants), test equipment (73 percent vs. 42 percent for all plants), and wire processing machines (36 percent vs. 14 percent for all plants).

Medical Device Manufacturing

In October, medical device manufacturer Steris Corp. unveiled plans to build an $11 million assembly plant in Mentor, OH. A month earlier, some 700 miles due south, Medline Industries began spending $35 million to expand its assembly plant in Lithia Springs, GA, by 50 percent, less than a year after it opened. The company plans to hire additional workers to support the new assembly lines.

Such investment has been typical in this seemingly recession-proof industry—but that may come to an end next year.

According to the NAIC system, Steris, Medline and other medical and dental device manufacturers are classified under Miscellaneous Manufacturing (NAIC 339).

Although this category also includes assemblers of sporting goods, jewelry, toys, pens, mops, musical instruments and caskets, companies like Steris represent the lion’s share of capital investment by this industry.

Thirty-five percent of plants in the industry say they’ll spend less on assembly technology in 2012 than they did in 2013. That compares with 26 percent for all U.S. plants, and it’s the highest percentage for the industry since 2010.

Actual budget figures tell the story better. Although 7 percent of plants in the industry will spend over $1 million on assembly technology next year, only 7 percent will spend between $250,000 and $1 million. That compares with 25 percent in 2012 and 15 percent in 2011. On average, manufacturers in NAIC 339 will invest $224,069 on assembly technology in 2013, compared with $148,812 in 2012. That’s certainly good. However, the median budget figure will go from $65,000 in 2012 to $50,000 in 2013.

Capital spending in NAIC 339 is expected to decrease 17 percent next year, from $239.6 million in 2012 to $200 million in 2013.

One reason for the decline could be anxiety over the looming excise tax on medical devices. Beginning Jan. 1, 2013, “Obamacare” will impose more than $30 billion in new excise taxes on medical technology companies, according to the Medical Device Manufacturers Association.

“We are already seeing the negative impact this onerous policy is having on jobs and innovation, and America’s med tech innovators can’t afford to find out what implementation of the device tax would bring,” says Mark Leahey, president and CEO of MDMA.

Compared with other industries, manufacturers in NAIC 339 are more likely to buy dispensing equipment (39 percent vs. 22 percent for all plants), conveyors (26 percent vs. 22 percent for all plants), and workstations (46 percent vs. 40 percent for all plants).