Cutting Tool Orders Contract for Second Month

Real cutting tool orders were $172.8 million in May 2015. Compared with May 2014, real orders were down 8.2 percent. This was the second conseuctive month of month-over-month contraction. And, the rate of contraction in May was the fastest since March 2013. The annual rate of change has grown at a decelerating rate for four straight months.

For May, my forecast was too high by 12.9 percent. Year to date my forecast was too low by 2.4 percent. But, these numbers don't seem to have much meaning because I based my forecast for 2015 off of the original data for 2014. It appears that the 2014 data is being revised higher as the 2015 data is released. This could be because more companies are reporting order data, but I'm unsure about this. My 2015 forecast is calling for cutting tool orders to increase 0.8 percent, but this is hard for me to forecast at the moment because of the data revisions. 

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, capital goods new orders, and the Gardner Business Index.