Money Supply at Lowest Level Since January 2017

The money supply shifted from a positive to a negative indicator this month, but this change typically takes 18 to 24 months to affect capital equipment consumption.

(Negative) In April 2018, the monetary base was $3.744 trillion. This was a decrease from last month and the lowest level since January 2017. Compared with one year ago, the monetary base decreased 2.5 percent, which was the second straight month of contraction. Therefore, the annual rate of growth decelerated to 2.6 percent. It appears that the rate of growth in the money supply has peaked.

Typically, decelerating growth in the monetary base leads to decelerating growth in capital equipment spending, particularly machine tool orders. The lag time is usually quite long, anywhere from 18 to 24 months as seen on the attached chart. 

Reports

Top Shops

‘Top Shops’ is a benchmarking and recognition program designed to help shops build their business.

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.