U.S. machine-tool orders jumped 77.1 percent in September, the largest monthly gain in more than two decades and another sign the economy may be poised to expand.
Machine-tool orders, which include metal-cutting and metal-forming instruments, are a barometer of industrial production and capital spending by manufacturers.
Compared with a year earlier, orders were up 6.1 percent last month, according to the Association for Manufacturing Technology, an industry group that compiles the monthly report.
”However, due to the deepening decline in export orders, it is unlikely that the industry will post a fourth quarter equal to the $798 million posted in 1991,” said Albert Moore, president of the trade group.
Analysts said that the statistics, not adjusted for seasonal considerations, are prone to wide swings.
”This is the wildest of the wild,” said Russ Sheldon, an economist at Mellon Bank in Chicago. ”It takes several months to build up a trend.”
The last time there was such a month-to-month gain was from November to December 1970, when orders climbed 79 percent, said Patrick McGibbon, director of statistics at the industry association.
Domestic orders increased 70.1 percent in September after declining 24.7 percent in August. Export orders advanced 115.7 percent last month after losing 2.8 percent in the previous month.
Spending on plants and equipment has traditionally increased in September because many businesses are closed for vacation in August.
Still, ”It`s another positive sign,” said Cynthia Latta, an economist at DRI/McGraw-Hill in Lexington, Mass. ”It`s consistent with some of the other things we`re seeing,” such as declining unemployment claims and increasing bank loan activity.
September`s level of machine-tool orders, $283.85 million, followed a decrease of 22 percent, to $160.25 million, in August, earlier reported as a decline of 23.2 percent, the industry report said.
Metal-cutting tool orders advanced 132.5 percent in September, to $212.70 million from $91.50 million in August, while metal-forming tool orders rose 3.5 percent, to $71.15 million from $68.75 million.
