February Machine Tool Orders Down 9.3%

According to USMTO, machine tool sales in February were 1,892 units and $348,713,000 in real dollars. Unit sales in February 2013 were 9.3% less than they were in February 2012. This is the largest month-over-month contraction in machine tool unit sales since December 2009. Also, it is the third month in a row that the month-over-month rate of change contracted. And, it is two months in a row with fewer than 2,000 machines sold. That is the first time that has happened since June and July of 2011. My forecast was for 2,175 units to be sold in February. Therefore, my February forecast is too high by 15.0%. For the year my forecast is too high 7.9%.

Real dollar sales continue to perform noticeably worse than unit sales. Month-over-month real dollar sales have contracted for eight of the last nine months. The last four months have seen the rate of contraction in double digits. The annual rate of change has contracted faster each of the last three months.

While durable goods production continues to grow at a historically fast rate it has been slowing down for the last six months or so. This is pointing to to further contraction in machine tool sales. The metalworking business index continues to contract faster, which is also indicating further contraction in machine tool sales. However, the value of the index has been improving significantly in recent months. The annual rate of change in the index should bottom out soon, which would point to a turn around in machine tool sales in the second half of 2013. According to our business index, real capital spending per plant for the next 12 months is growing at a constant rate. This is a positive sign for machine tool sales, indicating that we should growth in machine tool sales very soon.

For graphs on machine tool sales and the leading indicators go to our metalworking page.