Possible Turning Point in Cutting Tool Orders in 2020

In November, cutting tool orders contracted 11.3%, the fastest rate of contraction since July 2016.

In November, real cutting tool orders were $189.1 million, which was the lowest level for cutting tool orders since January 2018. Compared with one year ago, cutting tool orders contracted -11.3%, which marked the ninth consecutive month of month-over-month contraction. Additionally, this was the fastest rate of month-over-month contraction since July 2016. The annual rate of change also contracted at an accelerating rate for the second month. 

The GBI: Metalworking is a good leading indicator of cutting tool orders and leads cutting tool orders by seven-to-10 months. The annual rate of change in the Index has contracted for 10-straight months, clearly indicating that the annual rate of change in cutting tool orders will continue to accelerate. However, the GBI rate of change does appear to be in the initial stages of a turn. If it bottoms in the first quarter of 2020, then it would be expected that the rate of change in cutting tool orders would bottom around the summer of 2020.


Top Shops

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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.