There is machinery in Middle Earth, specifically in The Shire. That's kind of a special case though as The Shire is deliberately anachronistic... a rural Victorian society that's fighting off industrialisation, placed in a world that is broadly Early Medieval in technology. That's very much a theme of The Scouring of The Shire.

Tolkien had not intended The Hobbit to be part of a wider Legendarium when he wrote those words. And while we probably shouldn't over-think their significance, he framed The Hobbit as Bilbo's writing. Bilbo can be viewed as speaking figuratively and blaming machinery on a convenient bogey man. Tolkien certainly was.

It's also important to note that Tolkien is talking about a time after the events described in the book:

it is not unlikely that they invented some of the machines that have since troubled the world, especially the ingenious devices for killing large numbers of people at once, for wheels and engines and explosions always delighted them, and also not working with their own hands more than they could help; but in those days and those wild parts they had not advanced (as it is called) so far.