Overcapacity may be ending for many industries, as shown by anecdotal shortages of manufacturing capacity relative to surging demand.
According to Joseph Carson, an economist at Alliance Bernstein, “Companies are having a difficult time meeting the volume of business that’s in the channel.”
The problem goes beyond machine tools. Telecommunications-equipment makers Alcatel-Lucent SA and Telefon AB L.M. Ericsson have both said they are struggling to get enough electronic components to fill customer orders. When it reported results last week, technology-equipment distributor Tech Data Corp. said that it was seeing shortages of networking and printing equipment. Last month, aerospace giant Boeing Co. said parts shortages were hampering production of its 787 Dreamliner.
Like their customers, many machine-tool makers are struggling to ramp up. At one point last year, the Taiwan factory where Indianapolis-based Hurco Cos. makes machine tools for the U.S. and European markets was building just 30 new machines a month. Now it is building about 100. That’s still well below the 200 a month it was churning out before the recession, but Hurco says difficulties finding skilled workers to replace those laid off during the downturn have made it harder to meet demand.