October machine tool orders were 2,201 units and $376,181,000.

Machine tool orders of more than 2,000 units are typically a sign of a strong machine tool market. And, orders were more than 2,000 units for the second straight month and third time in five months. September’s unit orders increased 9.3% compared with one year ago, which was the second month in a row of accelerating month-over-month growth. As a result, the annual rate of contraction decelerated for the third straight month to its slowest rate of contraction since February. 

While unit orders increased compared with one year ago, dollar orders decreased by 1.6%. Therefore, the increase in unit orders was supported by a decrease in machine tool prices. However, this was the slowest rate of contraction since the contraction started in December 2018. The annual rate of contraction in dollar orders decelerated for the first time this cycle. 

Compared with one year ago, the GBI: Metalworking grew 6.8%, which was the fourth consecutive month of growth. The annual rate of contraction in the GBI decelerated for the fifth consecutive month and tends to bottom out 7-10 months prior to machine tool orders bottoming out. This would indicate that the annual rate of contraction in machine tool orders has bottomed out. The normal lag time could be accelerated this cycle because of significant government support for the economy due to the pandemic.