July USMTO Weak as Expected

In July, machine tool orders were 1,364 units and $233,463,000. July was a very weak month for machine tool orders. However, last fall we forecasted that worst part of this machine tool contraction would occur just before IMTS. Based on forecast, this should be the case, which means the annual rate of contraction will decelerate through the end of 2017.

The unit order total in July was the lowest since May 2010. Compared with one year ago, unit orders were down 29.8 percent in July. The month-over-month rate of change contracted for the 15th month in a row. The annual rate of change contracted for the 11th month in a row. The annual rate of change, now -19.4 percent, accelerated to its fastest rate of contraction in this downturn. However, we expect 2016 to be down 15.2 compared with 2015 and 2017 to be down 3.1% compared with 2016.

Real dollar sales were down 24.9 percent compared with July 2015. This was the 15th consecutive month that dollar orders have contracted. Real dollar orders have contracted at a double digit rate in 12 of the last 14 months. The annual rate of change contracted for the 14th month in a row and at its fastest rate (23.1 percent) in this down turn. 

The Southeast region is completely bucking the indsutry trend. While every other region saw significant contraction in July, the Southeast region saw unit orders increase 10 percent and dollar orders increase 13.5 percent. In the Southeast, both unit and dollar orders increased for the second time in the last three months. 

You can find more on machine tool sales and the leading indicators on our metalworking and monetary pages.