December Machine Tool Orders Flat

In December, machine tool orders were 2,515 units and $398,398,000. Outside of September, which was affected because of IMTS, December was the best month for machine tool orders since last December. While orders were generally flat compared with last December, the year-over-year is moving in a positive direction. And, key leading indicators - like capacity utilization and the GBI: Metalworking - are pointing toward growth in machine tool orders some time before the end of the first of 2017.

Compared with one year ago, unit orders were down 1.0 percent in December. However, unit orders have grown three of the last five months. The annual rate of change has contracted at a decelerating rate for five straight months. Annual machine tool orders are contracting at their slowest rate since September 2015, which was the first month they contracted this cycle.

While unit orders were down slightly, real dollar orders were up 0.3 percent compared with one year ago. Outside of September, again affected by IMTS, real dollar orders this month were the highest since March 2015. This was the four time in five months that real dollar orders increased compared with one year ago. As a result, the annual rate of change contracted at a decelerating rate for the fifth month in a row. December had the slowest rate of annual contraction since August 2015.

However, improving unit orders have come at the expense of dollar orders. The average of price of a machine tool was below the historical average 10 of the 12 months in 2016. But, compared with one year ago, the average price of a machine increased two of the last three months. Generally, increases in price are positive sign for the machine tool industry.