Cutting Tool Orders Weaken in April

Real cutting tool orders were $173.6 million in April 2016. This level of cutting tool orders for February-April was higher than November-January. However, the order total in April was 15.1 percent less than one year ago. This was the 12th conseuctive month of month-over-month (1/12 rate of change) contraction. The rate of contraction in February and March had fallen into single digits. The annual rate of change contracted at an accelerating rate for the seventh month in a row. 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. Durable goods new orders have contracted significantly, which has likely led to the contraction in cutting tool orders. However, there are some positive signs in recent new order data, which have seen the 1/12 rate of change grow two of the last three months. Also, while it is still contracting, the Gardner Business Index has improved somewhat since November.