January Machine Tool Orders Strongest in 20 Years

Machine tool orders increased 28.5 percent compared with one year ago.

In January, machine tool orders were 1,998 units and $350,223,000.

The 1,998 units were the most units ordered in January since January 1998. Compared with one year ago, machine tool orders increased 28.5 percent, which was the second fastest rate of growth since September 2011 (not counting months in which IMTS was held). January’s rate of growth was the fastest since January 2011 as the industry came out of the Great and Recession and the third fastest rate of growth in January in the history of the USMTO program. January, which is typically a weaker month for machine tool orders, was nearly 100 units above the historical average units ordered for all months. As a result, the annual rate of change accelerated to 10.5 percent, which was its fastest rate of growth since August 2017. Based on the high rate of growth in the GBI in 2017, machine tool orders should see accelerating growth for most of 2018.

While unit orders were strong, real dollar orders were even stronger, increasing 38.6 percent compared with one year ago. This was the fastest rate of month-over-month growth in real dollar orders since September 2011 (not counting months in which IMTS was held). The annual rate of growth, now 9.4 percent, accelerated for the fourth consecutive month.

In the West, the average machine tool price was above the region’s historic average for the second time in three months.

In the South Central, the average machine tool price soared to $236,100, well above the historic average of $180,000 for the region.

In the North Central-West, the annual rate of growth in real dollar orders was virtually the fastest since May 2012.

In February, the GBI: Metalworking index climbed to 61.3, which was its highest level since we reformatted the index in December 2011. The index has sustained a high level since February 2017. The index’s very positive start to 2018 and strong growth in 2017 are very positive signs for machine tool orders for the next seven to 10 months at least, since that is the lead time between the GBI: Metalworking and machine tool orders.

Reports

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World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

An annual survey that collects statistics regarding budgeted spending on machine tools, testing equipment, software and more.

Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.