Machine Tool Unit Orders Down 7.7 Percent in May
In May, machine tool sales were 1,937 units and $329,319,000. Compared with one year ago, unit orders contracted 7.7 percent. This was the fastest rate of contraction since November 2014. And this was the third time in five months that unit orders have contracted. The annual rate of change has grown at a slower rate the last two months and is now growing at its slowest rate since August 2014. My original unit forecast was too high by 35.5 percent while even my revised forecast was too high 11.0 percent in May. Year to date, my forecast was too high by 19.7 percent. I lowered my unit forecast last month and now expect USMTO orders to contract 3.2 percent in 2015.
Real dollar sales also contracted 7.7 percent in May. This was the fourth time in five months that real dollar orders have contracted month-over-month. While the annual rate of change in units was still growing in May, the annual rate of change in dollar orders has contracted for three straight months.
The North Central-West saw unit orders dip 1.9 percent compared with one year ago. However, they had significant growth the previous four months. So, the annual rate of growth was sill accelerating and is now at 6.2 percent. While unit orders contracted, dollar orders were up 13.6 percent. Annually, growth in dollar orders has accelerated for four months and is now at 10.8 percent.
The North Central-East has had growth in unit and dollar orders for two straight months although growth was much slower in May than in April. Annually, unit orders have been growing since March 2014 but dollar orders grew for the first time in three months.
The West saw unit orders increase 7.7 percent in May. Annually, unit orders grew at a rate of 5.1 percent, which has accelerated for three months. Dollar orders increased 15.6 percent in May. Annually, dollar orders are growing for the first time since 2014.
The Southeast saw unit orders contract for the first time since October 2014. They were down 4.1 percent in May. Annual unit order growth of 11.9 percent is currently the fastest of any region. However, dollar sales have contracted three of the last five months. Annual dollar orders are still growing, but at a much slower rate than unit orders. Therefore, average prices are struggling in the Southeast.
The Northeast has seen unit orders grow for four straight months. The annual rate of growth has accelerated for four straight months and is not at 4.5 percent. Dollar orders have grown five of the last six months. As a result, dollar sales grew on an annual basis for the first time since October 2014.
The South Central is currently the only region that is really struggling. Unit sales have contracted seven months in a row. They have contracted more than 55 percent in three of the last four months. The annual rate of change continued to contract faster and is now contracting at a rate of 17.5 percent. Dollar sales have been even worse, contracting more than 60 percent in two of the last four months. The annual rate of change in dollar orders is now down 21.4 percent.
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