3/20/2020 | 1 MINUTE READ

Machine Tool Orders Slide in January

January machine tool orders were 1,580 units and $262,793,000.

January’s unit orders were the lowest since January 2017. Orders for the month contracted 30.3% compared with year ago, which was the fastest one-month rate of contraction this cycle. This was the seventh month in a row of contraction and the eighth in the last nine. The annual rate of contraction decelerated to -14.0% from -10.9% this month.

Dollar orders contracted 34.0% compared with one year ago. This was 12th-straight month of dollar order contraction and the 13th in the last 14 months. Unlike unit orders, January’s rate of contraction in dollars was not the fastest of this cycle. January was the seventh month in a row of accelerating contraction in the annual rate of change in dollar orders as the rate rate of contraction fell to -20.9% from -18.1%.

While the GBI: Metalworking has been a negative leading indicator for future machine tool orders for a number of months, the Index is starting to turn (of course, this could change due to COVID-19 as new data comes out). First, the Index was 50.2 for the second month in a row in February 2020. Second, the month-over-month rate of change in the Index has contracted slower for four months, meaning the annual rate of contraction is very close to a bottom. The Index tends to lead machine tool orders by about seven months.

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