Cutting Tool Orders Very Strong in June

According to the Cutting Tool Market Report, a joint statistical program between AMT and USCTI, real cutting tool orders were $181.0 million in June 2014. This was 8.2% more than the order total for June 2013. This is the first time cutting tool orders have grown month over month since September 2013. And, the month-ove-month rate of growth was the fastest since the report began in January 2012. The annual rate of change contracted at its slowest rate since the report began as well.

For June, my cutting tool forecast was too low by a mere 0.6%. For the year, my forecast is too high by 4.1%. Based on my forecast, the month-over-month rate of change should remain positive for the remainder of the year. Therefore, the annual rate of change growth should contract at a steadily slower rate for the rest of the year. Orders in 2014 should end the year flat compared to 2013.

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, capital goods new orders, and the Gardner Business Index. Based on the limited time, the metalworking portion of the Gardner Business Index has potential to be a good leading indicator for cutting tool orders