Gardner Intelligence Blog

Machine Tool Orders Start 2021 on a Positive Note

Machine Tool Orders Start 2021 on a Positive Note

January machine tool orders were 1,831 units and $305,288,000.

Unit orders in January increased 9.1% compared with one year ago, marking the fourth month of growth in the last five months. As a result, the annual rate of contraction decelerated for the sixth straight month to its slowest rate of contraction, -8.8%, since September 2019. Amazingly, given a nearly complete lockdown of the economy in much of April and May, the bottom in the rate of annual contraction this cycle was nearly identical to the bottom of the rate of change in 2016.

Durable Goods Spending Growth Fastest Since Sept. 1985

Durable Goods Spending Growth Fastest Since Sept. 1985

In January, real consumer durable goods spending was $2,148.4 billion, which was an all-time high. Compared with one year ago, durable goods spending increased 17.1%, which was the fastest rate of month-over-month growth since September 1985. In the seven of the last eight months, month-over-month growth was more than 11%. The only exception was December when the growth rate was still 9%, nearly double the historic average. The annual rate of growth accelerated for the eighth straight month to 7.2%, which was the fastest rate of growth since November 2018.

While durable goods spending grew at an accelerating rate since the economic lockdowns started, total consumer spending contracted at an accelerating rate. Therefore, durable goods spending accounted for its highest percent of total consumer spending ever – 16.3% in December. Multi-decade trends show that durable goods spending steadily increased its share of total consumer spending while services decreased its shares. While the workforce may be trending toward a service economy, consumer spending is trending toward a manufacturing economy.

Durable Goods Orders Grow for Third Month

Durable Goods Orders Grow for Third Month

New orders for real durable goods totaled $231,273 million in January 2021. January’s orders were 3.1% more than one year ago, making January the third consecutive month of growth in durable goods new orders.

Compared with one year ago, a number of industries recorded double-digit growth in January, including:

January Income Increases 11.5%

January Income Increases 11.5%

In January, real personal income was $21,453,852 (millions of USD, SAAR). This was almost an all-time high and only eclipsed by April 2020. In spite of, or because of, the economic lockdowns, real personal income shot up dramatically from its 60-year up trend in April 2020. By November 2020, real personal income had returned to its multi-decade up trend. January 2021 resulted in a similar but smaller spike as April 2020.

Business Activity Surges on New Orders, Backlogs and Employment Gains

Gardner Intelligence: Business Index 57.1

Business activity levels as recorded by the Gardner Business Index (GBI) expanded during February thanks to further activity gains in new orders, backlogs, and employment.  Excluding export activity, all index components reported rising levels of business activity over the prior month.  New orders and backlog readings for the month rose to levels last reported in mid-2018 and February’s employment activity matched readings last reported in mid-2019.  The encouragement created by these gains however was tarnished by a 6-point rise in the supplier delivery reading.  Rising delivery readings indicate that order-to-fulfillment times are lengthening and that manufacturers in general are struggling to obtain the upstream goods necessary to complete their orders.  Removing the inflationary impact of the supplier delivery reading from the overall Index would have resulted in a March reading of 54.1, placing this series at its own 2½ year high.

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.