Machine Tool Sales Contract 24% in September 2013

According to USMTO, machine tool sales in September were 2,195 units and $396,339,000 in real dollars. Unit sales in September 2013 were 23.8% lower than they were in September 2012; however this was expected because September 2012 was affected by IMTS. While the annual rate of change had been essentially flat in recent months, the rate of change contracted for the first time since since April 2013.

My revised forecast for September was for 2,175 units. My forecast was too low by 0.9%. For the second half of the year my forecast is too low by 1.5%. My original 2013 forecast is too high by 10.8%. 

Real dollar sales contracted month-over-month for the 14th time in 16 months. On annual basis, unit sales started contracting in September but real dollar sales have been contracting since December 2012. Real dollar sales contracted at an annual rate of -10.8%, which is the fastest rate of contraction since June 2010. The average price of a machine continues to contract. The month-over-month rate of change was the slowest rate of contraction since May 2013. However, the annual rate of change of the price of a machine continues contract faster.

Durable goods production is still growing at a significant rate, but the rate of growth has been slowing down. This generally points toward slower machine tool sales. A positive sign for machine tool sales is that the annual rate of change in the metalworking business index appears to have bottomed out. The backlog index is contracting at a slower rate as well. This indicates that capacity utilization should begin growing faster again soon. This would be very positive for machine tool sales. 

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