Gardner Intelligence Blog

When most people think about the forefront of the international trade of manufactured goods between U.S. and China, it is usually high-value and patent-protected goods that come to the top-of-mind.  Rarely, if ever, might one think that the humble twist tie would be at the center of a paradigm shift in the world of international trade.  Yet that has been exactly the situation during 2020 with the U.S. Commerce Department through the International Trade Administration granting Bedford Industries a 122.5% tariff on Chinese imported twist ties in November[1]

What has made this case so transformative in the world of international trade is that the antidumping and countervailing duties were granted on the grounds that China has manipulated its currency, thereby allowing imported twist ties to be sold at Less-Than-Fair Value (LTFV) in part because China was determined in a November 2, 2017 publication involving aluminum foil to be a Non-Market Economy.  The greater ramifications of the twist tie ruling is that it opens the door to a very wide range of imported goods being subject to antidumping (AD) and countervailing duties (CVD) in the future since currency manipulation affects the prices of virtually all goods produced in the country in which the manipulation occurs.  Goods that are priced at LTFV can fall afoul of section 732(b) of the Tariff Act of 1930.

September Cutting Tool Orders Highest Since March

September Cutting Tool Orders Highest Since March

In September 2020, real cutting tool orders were $156.4 million, which was the highest order total since March. Compared with one year ago, cutting tool orders contracted -21.2%. While this was the 19th consecutive month of month-over-month contraction, it was the slowest rate of month-over-month contraction since March. 

The annual rate of change contracted at an accelerating rate for the 12th month. The annual rate of contraction was 19.0%, which was the fastest rate of annual contraction since the data was made public. While the annual rate of contraction continued to accelerate, the one-month and three-month rates of change contracted at a slower rate, indicating that a bottom in the annual rate of contraction is near.

Money Supply Growth Continues to Accelerate

Money Supply Growth Continues to Accelerate

In October, the monetary base was $4.917 trillion, which was an increase from the previous month but still below the peak in June. Compared with one year ago, October’s monetary base was up 51.2%, which was the second month in a row and fourth in the last six months with faster than 50% growth. This was the seventh consecutive month that the month-over-month rate of change was faster than 44%. This was the 11th month in a row of month-over-month growth. The annual rate of growth accelerated to 30.4% in October, which was the seventh straight month of accelerating growth and the fastest rate of growth since August 2014.

Historically, the annual rate of change in the monetary base leads capital equipment consumption, specifically machine tool orders, by 12-18 months. Although, the lead time between the monetary base and capital equipment consumption shrunk over the last decade. 

Durable Goods Capacity Utilization Highest Since February

Durable Goods Capacity Utilization Highest Since February

In October, durable goods capacity utilization was 70.8%, which was the third month in a row that the rate of capacity utilization was above 70% and the highest rate of capacity utilization since February. Compared with one year ago, capacity utilization contracted 4.4%, which was the sixth straight month that the month-over-month rate of change contracted at a slower rate and the slowest rate of contraction since February. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the 12th month in a row, falling to -9.3% from -9.2%. October was the fastest rate of annual contraction since March 2010. As the annual rate of change tends to lead capital equipment consumption by seven-to-10 months, capacity utilization is signaling a bottom in the annual rate of change in capital equipment about the second quarter of 2021.

Moldmaking Technologies Interviews Gardner Intelligence About the October 2020 Moldmaking Index Results.

Gardner Intelligence sat down with Christina Fuges of Moldmaking Technologies to discuss the rebound in manufacturing economic activity already being experienced by moldmakers, molders and the supporting community.   To learn more click the image below or visit www.moldmakingtechnology.com/

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.