Cutting Tool Orders Grow More Than 10 Percent

Cutting tool orders in November fell from their record high in October, but the rate of growth accelerated, jumping back above 10 percent.

In November, cutting tool orders were $209.4 million, making November the ninth-consecutive month cutting tool orders were above $200 million. While cutting tool orders fell from their record high of $223.6 million in October, the month-over-month rate of growth from 9.6 percent to 10.1, topping 10 percent for the sixth time in eight months. The annual rate of growth was more than 10 percent for the third-straight month. The annual rate of growth has steadily accelerated since April 2018.

And, there looks to be room further acceleration into early 2019. In December, durable goods production grew at its second-fastest rate since July 2015, pushing the annual rate of growth to 3.4 percent. The annual rate of growth was above the historic average for the first time since May 2013.

The GBI: Metalworking is a good leading indicator of cutting tool orders. While the rate of growth in the Index has decelerated, which typically signals decelerating growth in cutting tool orders, the index has remained at a very high level since early 2017. The consistently strong growth at metalworking facilities is a likely reason for the recent surge in cutting tool orders, but with the GBI leading cutting tool orders by seven to 10 months, it is possible that the annual rate of growth in cutting tool orders may have already peaked.


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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.