Economic News Blog
Posted by: Steven Kline, Jr. 18. December 2019

Cutting Tool Orders Highest in 12 Months

In October, real cutting tool orders were $216.3 million, which was the second time in three months that orders were above $200 million. Additionally, this was the highest level for cutting tool orders since October 2018. However, compared with one year ago, cutting tool orders contracted -5.0%, which marked the eighth consecutive month of month-over-month contraction. Additionally, the annual rate of change switched to accelerating contraction from decelerating growth. This was the first month of annual contraction since April 2017. 

The GBI: Metalworking is a good leading indicator of cutting tool orders. The annual rate of change in the Index has contracted for nine-straight months. In the last downturn in late 2015 and early 2016, the GBI: Metalworking contracted more than 10%, year over year, as did cutting tool orders. In November, the GBI: Metalworking showed annual contraction of 11.8%. The Index is clearly indicating that the annual rate of change in cutting tool orders will contract for the remainder of 2019 and into 2020. The GBI typically leads cutting tool orders by seven-to-10 months.

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