Newspaper article THE JOURNAL RECORD

Machine Tool Orders Down for Third Consecutive Month

Newspaper article THE JOURNAL RECORD

Machine Tool Orders Down for Third Consecutive Month

Article excerpt

The slowing of the economy and the continued slowdown in the automobile industry led to a 3.4 percent drop in new orders for U.S.-made machine tools in February.

It was the third consecutive monthly decline.

The Association for Manufacturing Technology, the trade association for the machine tool industry, said in a report released Monday that machine tool orders declined to $194.5 million, from $201.3 million in January.

The February total was down by 31 percent from the $281.9 million in new orders in February 1989.

For the first two months of the year, new orders were down by 22.8 percent, compared with the same period a year ago.

``This is an industry that is closely tied to economic growth,'' said Robert F. McCarthy, an analyst with Duff & Phelps Inc. in Chicago.

``And because the economy is slowing, the machine tool industry is directly affected. Because of uncertainty about the economy, companies are delaying their buying of new machinery. And the auto industry is still in a slowdown, which affects the order rate of new machine tools.''

Machine tools are power-driven devices that cut or shape metal parts used in products ranging from appliances and vehicles to aircraft and construction materials.

The strength of machine tool orders generally reflects the strength in industrial production, and economists consider their sales patterns to be important indicators of capital spending patterns by manufacturers.

The level of orders from foreign customers declined by 11.2 percent in February, and the analysts said that was a sign of a stronger dollar.

Compared with the level of orders in February 1989, new foreign orders rose by 11.3 percent.

The orders from foreign customers increased by 27.3 percent in the first two months of this year from the levels of the comparable period last year.

``We are seeing a pause in domestic business activity, as manufacturers weigh their investment needs for the 1990s,'' said Albert W. …

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