Cutting Tool Orders Spike in May

Real cutting tool orders were $191.9 million in May 2017, which was the second highest monthly total since April 2015. Comapred with one year ago, orders increased 14.4 percent, which was the fastest rate of month-over-month growth since December 2014. The annual rate of change grew for the first time since September 2015.

Tthe GBI: Metalworking showed the metalworking industry is rapidly improving. The month-over-month rate of change of the index grew for the 11th month in a row and the annual rate of change has grown at an accelerating for seven months. The annual rate of growth in May was the fastest since March 2011. The index leads cutting tool orders anywhere from six to 12 months. Therefore, the index is indicating that the annual growth rate in cutting tool orders should accelerate through at least the end of 2017.

The trend in durable goods new orders, which also is a good leading indicator of cutting tool orders, appears to be moving in a positive direction for future cutting tool orders. Durable goods new orders generally have contracted at a decelerating annual rate since October 2015.