March Machine Tool Sales Up 35%

According to the USMTC, March 2010 machine tool sales were up 35% and 57% compared to March 2009 in units and dollars, respectively. This is the largest month over month increase in unit sales since September 2006 and in dollar sales since September 2004 (both of which were affected by IMTS). While the percentage gains are large, the actual sales amounts are still relatively low from a historical perspective. Unit sales are at an amount roughly equal to late 2003 when the industry was just starting to recover from the last recession.

I forecast machine tool sales using a series of charts that show trends in several leading indicators. While the rate of change curves on these charts are showing a continued deceleration in the rate of contraction (that’s good for machine tool sales) the actual levels of the leading indicators have been somewhat stagnant for the last six to eight months. This leads me to think that the current trend in machine tool sales could slow down in the second half of the year. However, if machine tool sales continue on their current trend, then my forecast (represented by the dotted line on the chart below) for unit sales will be too low and we could see unit sales grow by 15-20% in 2010 compared to 2009.