Machine Tool Orders Contracting as Expected

In April, machine tool orders were 1,584 units and $272,360,000. Orders are contracting as we expected last fall. The rate of change in orders is likely to contract faster until IMTS. At that time, the rate of change should level off for the remainder of 2016.

The unit order total in April was the second lowest since August 2010 (only January 2016 was lower). Compared with one year ago, unit orders were down 28.0 percent in April. The month-over-month rate of change contracted for the 12th month in a row, and April had the fastest rate of contraction in almost seven years (excluding all Septembers because they are affected by IMTS). The annual rate of change contracted for the eighth month in a row. The annual rate of change, now -17.5 percent, contracted at an accelerating rate for the fifth month in a row. My unit order forecast for April was too low by 2.2 percent. Year-to-date my forecast is too low by 12.4 percent, mostly due to March being much better than expected.

Real dollar sales were down 28.3 percent compared with April 2015. This was the 12th consecutive month that dollar orders have contracted. While February and March contracted at single digit rates, April contracted at the fastest month-over-month rate in almost seven years (again excluding all Septembers because of IMTS). The annual rate of change contracted for the 11th month in a row and at its fastest rate in this down turn. 

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