<U.S. Economy> Machine Tool Orders Fell 4% in December, Industry Says
Hi Lee:
Since the markets do not appear to like to hear too rosy of an economic news,perhpas this will make them happy today,you think? I think it should as it could be construed as sign of the economy slowing down a bit thus dampening the fears of hyper growth.?
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Washington, Feb. 7 (Bloomberg) -- U.S. orders for machine
tools declined in December for the third straight month as demand
fell in the West and the Northeast, an industry survey said.
Orders from U.S. companies for domestic and foreign-produced
machine tools fell 4 percent in December to an estimated $482
million from a revised $503 million in November, according to a
joint report from the Association for Manufacturing Technology
and the American Machine Tool Distributors' Association.
U.S. manufacturers in December were still reeling from a
decline linked to economic problems in Asia and Latin America,
said Robert Gardner, a spokesman for the AMT.
AMTDA President Ralph J. Nappi said that ''after a five year
ride to the top, machine tool consumption cooled in 1998. While
the fundamental indicators for manufacturing are still sound, we
will likely experience a sporadic year for capital equipment
expenditures, with various industries hitting peaks and declines
throughout 1999.''
Machine tool orders for 1998 were down 12 percent to an
estimated $7.6 billion from $8.6 billion in 1997. Machine tools
are cutting or forming machines used to make a myriad of metal
parts used in manufacturing, from tractor hoods to airplane
wings.
December orders fell 39 percent from the estimated $787
million total for the same month last year. November orders were
revised up from a previous estimate of $440 million.
The tools report, watched by analysts as a gauge of
industrial output, contrasts with recent government statistics
pointing to a pickup in the manufacturing economy.
Manufacturing Rebound
Orders placed with U.S. manufacturers rose 2.3 percent in
December, signaling a faster pace of expansion than analysts, who
predicted 0.9 percent growth, had expected. Strong demand for
everything from computers to turbines helped manufacturers post a
strong finish to an otherwise weak year.
For all of last year, factory orders increased 2.1 percent -
- the weakest performance since a 2.3 percent decline in 1991. In
1997, factory orders rose 5.4 percent.
The manufacturing outlook may brighten further in 1999,
judging from industry figures showing the beginnings of a
recovery in January as production and new orders expanded and
export demand improved.
The National Association of Purchasing Management's index of
manufacturing activity rose to 49.5 last month from 45.3 in
December.
Actual Orders Decrease
The two machine tool trade groups each month estimate
purchases based on the actual number of orders placed by selected
U.S. manufacturers with domestic and international companies. The
estimates are intended to give a more complete picture of the
industry than actual orders because not all companies report
their business to the trade associations.
Actual machine tool orders declined 4.2 percent in December
to $337.5 million from $352.2 million in November, the groups
said.
The largest drop in December's actual orders came in the
West -- covering five states from the Rocky Mountains to the
Pacific Ocean and accounting for 5 percent of all orders. Orders
in the region plunged 40.7 percent to $31.27 million.
Orders also dived in the Central region, composed of the 17
states between the Rocky Mountains and the Mississippi River, and
making up 12 percent of total demand. Orders there fell 22.9
percent to $40.55 million.
In the South, orders fell 13.8 percent to $47.37 million,
and in the Northeast, orders decreased 13.5 percent to $51.5
million. Together, these regions accounted for 29 percent of
demand for machine tools in December.
The Midwest region, which surrounds the Great Lakes and
accounted for more than half the orders, was the only region
where demand increased. Orders there rose 16.7 percent to $179.52
million in December.
Exports of machine tools by U.S. manufacturers, which are
counted separately from domestic orders, rose 30.1 percent in
December to $42.7 million from $32.8 million in November.
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