December Gives Machine Tool Orders a Bump

Feb. 14, 2017
First month-to-month increase since September leaves final 2016 numbers in better shape, 2017 optimism higher • $406.72 million • $4.013 billion for the year • Southeast finishes with biggest year-over-year gain

The end of another year provided a nice bump for new machine tool orders, though the year itself will be remembered as moderately disappointing.

New orders increased 20.6%, according to the U.S. Manufacturing Technology Orders report issued by the Association for Manufacturing Technology. That snapped a two-month slide, but closed the book on a year where the year-over-year figure dropped 4.0%. Hope springs eternal, though, and there are some good warning signs.

The Purchasing Managers Index, published by the Institute for Supply Management, checked in at 56.0 in January, indicating expansion in manufacturing for the fifth straight month. Capacity utilization and industrial production also increased in December, as did cutting tool consumption and machine shop spending.

“There has been a significant uptick in shipments for cutting tools,” AMT President Douglas K. Woods said, “and machine shop spending was 32% from November. Since large manufacturers will leverage their supply chain’s capital equipment before expanding their own capacity, gains for machine shop investment are promising, because they typically mark an over greater need for capacity and a broader upturn on the horizon.”

So, will 2017 prove a better year than its immediate predecessor? Best not to count unhatched eggs and all that, but the forecast looks good.

December orders totaled $406.72 million, up nearly $70 million from the $337.24 spend in November, reflecting the second-biggest monthly total for the year (after September, which finished at $503.67 million, and benefited from the IMTS bump.

Total orders for the year were $4.013 billion, down from the $4.178 billion in 2015. With another year of numbers converted from pencil into permanent ink, there are some interesting facts to consider:

New orders in the Southeast region increased 20.1% year-over-year, with total orders up to $540.39 million in 2016. That figured was buoyed by a strong finish to the year: Total orders increased 30.4% in December from November.

Year-over-year orders declined 1.2% in the North Central-West region ($758.90 million from $768.10 million); declined 3.6% in the Northeast ($769.41 million from $798.12 million); declined 16.0% in the North Central-East ($1.003 billion from $1.193 billion); and declined $21.0 in the South Central ($245.13 million from $310.18 million).

Latest from News

Hasan Hüseyin Yücel
U.S. Dept. of Defense
General Motors
GE Aerospace