Machine Tool Contraction Bottoming Out

The last two months of machine tool orders were the two highest of 2020.

July machine tool orders were 1,818 units and $321,898,000.

July’s unit orders were the second-highest of 2020. July’s orders contracted 9.5% compared with one year ago, which was the third slowest rate of contraction in the last 12 months. The annual rate of contraction was 20.1%. The rate has contracted for 12 months, accelerating for seven consecutive months. However, the annual rate of contraction was clearly starting to bottom in July.

Dollar orders contracted 16.3% compared with one year ago. This was the 18th straight month of dollar order contraction. The annual rate of change contracted for the 13th month in a row.

The West region had a strong month with unit orders up 2.2%.  Unit orders in the Southeast increased 25.8% compared with one year ago, growing for the second month in a row. 

Compared with one year ago, the Gardner Business Index grew 0.6%. It was the first month of growth month-over-month growth since October 2018.  The annual rate of contraction in the GBI decelerated for the second month in a row and tends to bottom out 7-10 months prior to machine tool orders bottoming out. That lag time could be accelerated this cycle because of significant government support for the economy due to the pandemic.

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.