Machine Tool Orders Up in Dec. but Not for Year
Orders for American-built machine tools surged in December compared to the depressed levels of a month earlier, but were lower for the year because of falling foreign demand, an industry group reported Sunday.
The Assn. for Manufacturing Technology said orders totaled $200 million in December, up 24% from the $161.3 million level of November, when customers canceled an unusually big number of purchases. Contrasted with December, 1991, orders were down 41.7%.
Many of the November cancellations had stemmed from customer uncertainty over whether the newly elected Clinton Administration would provide tax incentives for investments in equipment such as industrial machine tools.
It remains unclear whether the Administration will do that. But Albert W. Moore, association president, said in a statement, “We look forward to a stronger 1993 and the new Administration’s initiatives, if any, to revive the manufacturing sector in America.”
The association, based in McLean, Va., compiles a monthly report that covers 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 fluctuate widely.
Nonetheless, orders for machine tools are considered a useful forward-looking barometer of industrial health because they play a key role in the output of a broad range of goods, from kitchen appliances to jet engines.
When orders for machine tools rise, it signals manufacturer confidence that orders for their own products will rise as well.
For all of 1992, machine tool orders totaled $2.476 billion, down 6.3% from the $2.642 billion level of 1991. Moore attributed much of the decline to slack foreign demand due to faltering economies abroad.
Both Europe and Japan are struggling with significant economic slowdowns that have reduced their appetite for American exports.
The association said export orders in December totaled $34.05 million, up 87.1% from the $18.20 million of November but down 41.4% from the $58.10 million level of December, 1991. For all of 1992, export orders totaled $341.50 million, down 37.5% from the $546.55 million level of 1991.
