Cutting Tool Orders Fall 8.5 Percent in August

Real cutting tool orders were $168.8 million in August 2015. Compared with August 2014, real orders were down 8.4 percent. This was the fifth straight month of month-over-month contraction. And, August was the fastest contraction of those five months. The annual rate of change has grown at a decelerating rate for seven straight months (see the first chart). While there is not much history to work from with this report, there are a number of potential leading indicators for this data series, including durable goods production, durable goods new orders, and the Gardner Business Index. All three of the aforementioned leading indicators are pointing towards slower annual growth in cutting tool orders.

Gardner's Tooling and Workholding Survey projects that spending on tooling will be $4.138 billion (see the second chart). This is down 7 percent from our latest estimate for 2015. However, this level of spending is still quite a bit above the average level since 2002.