Large US manufacturers will spend more on technology this year to help reduce labour costs and make better use of their existing systems, according to executives at the recent Reuters Manufacturing Summit.
The steep rise in oil prices and higher raw material prices have restrained budgets.
But US manufacturers are making selective investments in areas such as security, enterprise resource planning and supply chain management to save costs and boost profits, according to technology research firm Gartner.
"Traditionally manufacturing has not been a huge tech spending area and people are still very conservative," said Rebecca Wettemann, an analyst at NucleusResearch.
"However, manufacturers realise that in key areas such as integration and business intelligence, the alternatives are very costly and labor intensive," Wettemann said.
"That is where they are focusing on because they can see real returns from it."
The chief executive of Rockwell Automation Inc, whose products help factories run more smoothly, told the summit his company is raising its technology budgets this year by seven to eight per cent.
Rockwell is interested in real time information technology which allows quicker response, radio frequency identification devices that help track goods, wireless devices and security to cope with a changing business environment.
"The supply chain keeps shrinking," said Rockwell chief executive Keith Nosbusch. "Today everyone wants to build the product after they get an order. It's about using the information to take action and make decisions. That is critical and that is where we are spending the money."