Machine Tool Orders Rise 5.1% in May
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NEW YORK — Orders for U.S.-made machine tools rose 5.1% in May, a trade group reported Sunday, adding to other recent data suggesting that the economy may yet escape a recession.
The May orders were $387.1 million, up from $368.3 million the month before, according to the Assn. for Manufacturing Technology in McLean, Va. In May, 1994, the orders totaled $322.9 million.
For the year to date, machine tool orders reached $2.09 billion, up 19.9% from the same period in 1994.
“Exports continue to drive growth in new machine tool sales. Clearly, there is value in the soft dollar for U.S. manufacturers,” said Albert W. Moore, association president. The weaker dollar has helped make U.S. goods more affordable overseas.
Machine tool export orders rose 80.8% to $64.1 million in May from the month before. Domestic orders in May fell 3% from April to $323 million.
Overall, the May machine tool order figures suggest unexpected economic strength, given that the belief that the economy is slowing has become widespread.
On Friday, the Commerce Department reported that durable goods orders grew 2.5% in May after having declined for three straight months.
As the debate continues about whether the economy is headed for a recession or for a “soft landing,” signs of strength seen in the durable goods and machine tool reports argue against a recession.
Machine tools are used to cut and shape metal for products ranging from jet airplanes to consumer electronics. They are considered a gauge of future economic performance. A rise in orders, therefore, is seen as an indication that businesses are confident that sales will grow enough to justify investing in new equipment. Conversely, fewer orders suggest factory managers see little need to expand.
Machine tool shipments rose 5.9% in May to $382.6 million from $361.4 million the month before. In May, 1994, shipments were $361.1 million.
The backlog of machine tool orders in May stood at $2.43 billion, up from $2.425 billion in April. A year ago, the backlog was $1.64 billion.
