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According to USMTC, machine tool sales in March were 90.9 percent (units) and 109.1 percent (real dollars) more than in March 2010. Actual units sold in March were 2,425, which is the highest total since September 2008. Real dollar sales were the highest since March 2008 and the ninth highest since the USMTC program started in January 1996.
The chart below helps show the difference in the last two machine tool recoveries. In 2003, unit and dollar sales started moving up at a consistent rate once the bottom was hit. It took about four years for sales to reach the level they were at prior to the recession in 2001. Today, unit sales have reached at least the lower end of the sales range from 2007 to 2008, while dollar sales are solidly at 2008 levels. However, in this downturn, machine tool sales stayed at their bottom level for almost a year. Then, sales shot up very fast, returning to the pre-recession levels in just one year instead of four. And, this is after a much deeper and steeper decline in the current recession than the previous one.
I think the comparison between these two recoveries shows the effect of significantly lower interest rates and massive amounts of money printing by the Federal Reserve since late 2008. These policies have a much greater impact on capital markets, equipment and financial, than the general economy. Hopefully, these policies translate into a sustainable recovery at some point, but history does not look favorably on the particular policies implemented since 2008.
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