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Machine Tool Orders Remain Strong

October machine tool orders were above 2,000 units for the third consecutive month. The last time that happened was October to December 2007.

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According to USMTC, machine tool orders in October 2011 were 2,165 units and $424,506,000. This is the third consecutive month with orders above 2,000 units. The last time that happened was October to December 2007 (orders were above 2,000 units for five straight months).
 
Compared to one year ago, machine tool sales are up 10.9 percent in units and 11.6 percent in real dollars. The one-month rate of change for units and dollars peaked in January 2011 at 131.5 percent and 177.9 percent, respectively. So, while orders remain strong in terms of the level of sales the growth of orders has slowed significantly. This should enable machine tool builders to start shortening their backlog of orders.
 
On a year-over-year basis, orders in units and real dollars are still growing at their fastest rates in at least the last 40 years (see chart). However, the annual rate of change for both units and dollars has shown slower growth each of the last five months. Although, two of the most important leading indicators for machine tool sales remain positive.
 

On a monthly, quarterly, and annual basis, the dollar continues to get weaker relative to other major currencies. Also, the one-month rate of change for consumer durable goods industrial production has grown faster for three months, which has pushed the annual rate of change to faster growth for two months. For more information on machine tool sales and leading indicators, go here