January Machine Tool Orders Contract as Expected

In January, machine tool orders were 1,413 units and $263,421,000. This was a significant decline from December and  a notable decline from last January. However, the decline was relatively in line with expectations.

Compared with one yearo ago, unit orders were down 16.8 percent in January. The month-over-month rate of change contracted for the ninth month in a row, and January had one of the faster rates of contraction during those nine months. The annual rate of change contracted for the fifth month in a row. The annual rate of change, now -11.5 percent, contracted at an accelerating rate. My unit order forecast for January was too low by about 8 percent.

Real dollar sales were down 23.7 percent compared with January 2015. This was the ninth consecutive month that dollar orders have contracted. In five of the last six months, dollar orders have contracted more than 20 percent. The annual rate of change has contracted at an accelerating rate for eight straight months. In January, it was -19.9 percent. During this cycle, dollar orders are performing noticeably worse than unit orders.

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