Cutting Tool Orders Increase for Third Month in a Row

Real cutting tool orders were $179.3 million in February 2015. For the last three months, this has been about the average level of cutting tool orders. February's order total was 0.6% more than the order total for February 2014. This was the third month in a row and the fifth time in six months that the month-over-month rate of change increased. The annual rate of change has grown at a consistent rate of about 2% for three straight months.

For February my forecast was too low by 8.0%. Year to date my forecast was too low by 9.5%. Much of this error was because I based my forecast for 2015 off of the original data for 2014. It appears that the 2014 data is being revised 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 4.4%. 

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. Based on the limited time frame, the metalworking portion of the Gardner Business Index has potential to be a good leading indicator for cutting tool orders.