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Machine Tool Sales Maintain Strength

The weak dollar is generally a positive sign for machine tool sales in the United States.

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According to USMTC, machine tool sales in July 2011 were 77.2 percent (units) and 104.3 percent (real dollars) more than in July 2010. Both of these annual rates of change are very high historically, although they have slowed somewhat each of the last two months. Machine tool sales are still in the range of sales from 2006 to 2008. July’s unit sales were just slightly below the average monthly sales since the market returned to “normal” in September 2010.
 
A good leading indicator for machine tool sales is industrial production, which leads machine tool sales by 12 to18 months, historically. The growth rate of industrial production has slowed each of the last seven months, which indicates that the growth rate in machine tool sales should slow, too.
 

Another good leading indicator for machine tool sales is the exchange rate. The dollar continues to get weaker relative to other currencies. This is generally a positive sign for machine tool sales in the United States.