Orders for Machine Tools Take a Slight Drop in July

Orders for U.S. machine tools were down slightly in July, reflecting weakening foreign demand for U.S. products, the industry’s trade group reported today.

Domestic orders rose in July, according to the monthly figures issued by the Assn. for Manufacturing Technology.

The association, based in McLean, Va., said July orders for machine tools totaled $205.60 million, a 2.8% decline from the previous month but 6.4% above the July, 1991, figure.

Economists said the data indicated that U.S. corporate profits were improving--enabling companies to invest in new equipment--but that weakness in economies abroad was holding back the U.S. recovery.

Exports had been helping the economy climb out of recession.

“Lower exports are helping to prevent the recovery from gaining significant momentum,” said Lynn Reaser, chief economist at First Interstate Bancorp in Los Angeles.

The machine tools data was consistent with other figures on the economy, she said.

The association’s figures combine two categories of tools--for metal cutting and metal forming. Taken together, they represent a relatively small industry, and the monthly figures on orders can vary widely.

Many economists consider the statistics an important barometer of the strength in industrial production, however, because machine tools are used to manufacture goods ranging from dishwashers to jumbo jets.