Economic News Blog
Posted by: Steven Kline, Jr. 16. January 2020

Machine Tool Orders Fall, Lining Up with GBI Predictions

November machine tool orders were 1,853 units and $305,720,000.

Unit orders were under 2,000 – the mark of a healthy machine tool market – for the fifth time in seven months. Orders for the month contracted 26.8% compared with one year ago, marking contraction for the 10th-​​​​​​straight month and 11 of the last 12 months. This was the fourth-straight month with more than 25% month-over-month contraction. The annual rate of contraction, 15.1%, accelerated for the fourth month in a row and contracted at its fastest rate since August 2016.

Dollar orders contracted 31.3% compared with one year ago, mirroring unit orders by contracting for the 10th-​​​​​​straight month and 11 of the last 12 months. The annual rate of contraction in dollar orders accelerated to 19.3%, which was also the fastest rate of contraction since August 2016.

The GBI: Metalworking has been a negative leading indicator for future machine tool orders for a number of months. There are some signs that the index’s rate of contraction may be approaching a bottom, but it will take another couple of months to determine that. It is likely that machine tool orders will contract overall in 2020. However, IMTS is taking place in September 2020, and it tends to be a turning point for machine tools. It could be the point at which the rate of contraction in machine tool orders bottoms next year and orders being to improve.

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