Monetary Base Continues Double-Digit Contraction

Six-straight months of double-digit contraction in the money supply are signaling slower growth and possible contraction in capital spending in 2019.

March was the 14th consecutive month of month-over-month contraction in the monetary base, which was $3.303 trillion. For each of the last six months, the month-over-month rate of contraction was faster than 11%. Only the ten-month period from June 1921 to March 1922 had a longer streak of double-digit contraction month-over-month. 

As a result, the annual rate of change in the money supply contracted for the seventh month in a row, accelerating to -8.9 percent. This was the fastest rate of annual contraction since September 1922. The money supply is indicating that the current decelerating growth in machine tool orders (and quite likely capital equipment in general) will continue for some time.


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.