Orders for Machine Tools Skid 26.3% in November
New orders of machine tools dropped 26.3% in November, indicating that the industry’s sluggishness is continuing, as orders from a number of industries, particularly auto makers, remain dull.
U.S. machine tool orders fell to $132.7 million from a revised $180.2 million in October, according to the National Machine Tool Builders Assn. The trade group also said November orders were off 32% from orders of $195.1 million in November of last year.
Analysts blamed the decline on the sluggish economy and confusion surrounding the impact of recent changes in the tax law.
Machine tools are complex machines used to shape metal parts. Their sales are an important indicator of capital spending by producers of metal products, particularly the auto and aerospace industries.
Machine tool orders have also been hurt by imports, which make up about 43% of the $4.3-billion industry. While analysts are optimistic about recent action taken by the Reagan Administration to limit imported machines, they do not think that any positive impact will be felt until mid-1987.
The association said total shipments of machine tools fell 31.3% last month to $166.8 million from a revised $242.8 million in October. They were 16.2% below the $199.2 million in orders in November, 1985.
Industry analysts have said that agreements signed earlier this month by Japan and Taiwan to reduce exports of machine tools to the United States probably will not help sales of domestic manufacturers much until about mid-1987. They said large inventories of Japanese-made machines are still being offered at competitive prices in the United States.
The federal government pressured Japan and Taiwan to agree to cut their machine tool shipments to 1981 levels. About two weeks ago, the government also said that imports from West Germany and Switzerland of certain machines also will be held to their 1981 market share. However, those countries refused to sign a formal agreement.
Seven other countries that export machine tools to the United States were warned that action would be taken to curb their sales if they boosted shipments above 1985 levels to take advantage of cutbacks by the four leading foreign suppliers.
