Machine Tools Up 4th Straight Month in August

According to USMTO, machine tool sales in August were 2,126 units and $361,760,000 in real dollars. Unit sales in August 2013 were 1.5% higher than they were in August 2012. This is the fourth consecutive month that machine tool unit sales have increased compared to one year ago. However, the rate of growth has slowed in each of those months. The annual rate of change has been essentially flat since April 2013.

My revised forecast for August was for 2,100 units. My forecast was too low by 1.2%. For the second half of the year my forecast is too low by 1.7%. My original 2013 forecast is too high by 10.6%. 

Real dollar sales contracted month-over-month for the 13th time in 15 motnhs. The month-over-month rate of contraction accelerate for the third straight month in August. The month-over-month rate of change in August was the fastest rate of contraction since October 2009. Unit sales moderately growing and real dollar sales contracting at an accelerating rate indicate that machine tool sales should continue to soften, particularly from a unit perspective.

Durable goods production is still growing at a significant rate, but the rate of growth has been slowing down. This generally points toward slower machine tool sales. A positive sign for machine tool sales is that the annual rate of change in the metalworking business index appears to have bottomed out. According to our business index, spending per plant is still growing but at a slower rate. A final positive sign is that broad dollar exchange rate continues to grow more slowly.

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