Economic News Blog
Posted by: Steven Kline, Jr. 17. June 2013

Machine Tool Contraction Accelerates

According to USMTO, machine tool sales in April were 1,887 units and $333,352,000 in real dollars. Unit sales in April 2013 were 11.9% less than they were in April 2012. This is the fourth time in five months that the month-over-month rate of change for units has contracted. This was the first double digit rate of contraction in the one-month rate of change since December 2009. The annual rate of change contracted for the first time since July 2010.

My unit forecast for March was for 2,250 units to be ordered. This was too high by 19.2%. My forecast through April is too high by 10.1%. If machine tool sales continue at their current pace, the annual rate of change will contract faster throughout the rest of 2013. In this case, 2013 machine tool unit sales would be about 11.5% less than they were in 2012.

Real dollar sales contracted month-over-month at a double digit rate for the fifth time in six months. The annual rate of change is contracting at its fastest rate in this cycle. However, the average price of a machine has contracted more slowly each of the last two months. This indicates that supply and demand are moving into balance. Historically, the average price of machine leads real dollar sales. If the average price of a machine continues to contract more slowly, this would be a positive indicator for future machine tool sales.

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

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