Tool orders show vigor of economy

January 31, 1994|By Bloomberg Business News

WASHINGTON -- U.S. machine tool orders rose 32.2 percent in 1993 to the highest level in five years, reflecting strong demand in the auto industry and a rebound in the U.S. economy, new figures released Sunday showed.

Machine tool orders, which include metal cutting and forming instruments, are a gauge of industrial production and businesses' spending plans.

Last year's total of $3.282 billion in orders, which followed $2.482 billion in 1992, was the highest since $3.591 billion in 1988, the Association for Manufacturing Technology said.

The gain is consistent with the acceleration in industrial production, spurred in large part by consumer demand for cars and trucks amid the lowest loan rates in decades.

Output of the nation's factories, mines and utilities rose 4.2 percent last year -- the strongest showing since 1988. In addition, orders for big-ticket goods ranging from autos to computers rose 2.2 percent in December for the fifth straight monthly gain -- the longest string of advances in more than six years. For all of 1993, orders for durable goods advanced 8.6 percent, the best annual showing since 1988.

In December, machine tool orders advanced 37.4 percent to $319.1 million after declining 7.5 percent in November to $232.3 million, earlier reported as a 4 percent decrease to $241.2 million.

"December was the best month of the fourth quarter for a majority of the machine tool builders," said Albert Moore, president of the Association for Manufacturing Technology. "With international markets flat, a strong, dynamic domestic market will be essential to continued growth in 1994 and beyond."

By category, metal cutting tool orders increased 38.8% last month while metal forming tool orders climbed 34%

Also in December, machine tool shipments advanced 54.3% to $376.2 million, while the backlog of machine tool orders narrowed 3.8% to $1.429 billion.

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