Economic News Blog
Posted by: Steven Kline, Jr. 14. March 2016

Cutting Tool Orders Remain Weak

Real cutting tool orders were $153.1 million in January 2016. This was the lowest level for cutting tool orders since December 2013. The order total in January was 17.4 percent less than one year ago. That was the fastest rate of month-ove-rmonth contraction since the data was made publicly available in January 2012. Also, the rate of contraction has been more than 16 percent in three of the last four months. The annual rate of change contracted at an accelerating rate for the fourth month in a row. While there is not much history to work from with this report, there are a number of potential leading indicators for this data series, including durable goods production, durable goods new orders, and the Gardner Business Index. Durable goods new orders have contracted significantly, which has likely led to the contraction in cutting tool orders. However, there are some positive signs in recent new order data, particularly in automotive and aerospace. Also, while it is still contracting, the Gardner Business Index has improved in recent months.

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