Machine Tool Unit Orders Jump above 2,000

In March, machine tool orders were 2,096 units and $360,956,000. Monthly orders above 2,000 units are typically an indication of a good machine tool market. While unit orders were up significantly compared with February, this is not an appropriate comparison. March is almost always significantly higher than February because it is the end of the Asian fiscal year. Therefore, we need to compare March to March

Compared with one year ago, unit orders were down 21.4 percent in March. The month-over-month rate of change contracted for the 11th month in a row, and March had the fastest rate of contraction in almost six years (excluding all Septembers because they are affected by IMTS). The annual rate of change contracted for the seventh month in a row. The annual rate of change, now -15.5 percent, contracted at an accelerating rate for the fourth month in a row. My unit order forecast for March was too low by 18.9 percent, which made my first quarter forecast too low by 13.4 percent.

Real dollar sales were down 12.3 percent compared with March 2015. This was the 11th consecutive month that dollar orders have contracted. However, this was the slowest rate of month-over-month contraction since July 2015. The annual rate of change contracted at a slightly slower rate in March, which ended a string of nine months of accelerating contraction. So, while unit orders are getting worse dollar orders are moving closer to a recovery.

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