The Machine Tool Industry Is On Fire: A Mini Trend Report

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Not literally, of course. I don’t want to panic anyone in the equipment industry today. Instead, we have good news.

As you know, we’ve developed a habit of checking in with a different segment at Direct Capital each week for a report, and we handled acquisition on Wednesday. Given that we have had one larger post this week, I thought I’d check in on a report from Monitor Daily and our own Director of Client Services Brian Varney that machine tools sales are absolutely bonkers right now.

Let me hit you with a few  key points from this report:

  • The total consumption for March was $511.15 million.
  • That total is up 57.6 percent from February.
  • That total is also up 99 percent from March 2010.
  • Holy crap.

What’s driving those huge gains? The President of the American Machine Tool Distributors’ Association—let’s please call them AMTDA from here on out—has some insight:

“Machine tool sales exceeded expectations again in March and by a large margin; this is a great sign for the U.S. economy,” said Peter Borden, President of AMTDA. “Not only are customers modernizing to become more efficient and to increase capacity as energy and commodity prices rise, but also supplier price increases and reduced inventories seem to be pulling orders sooner in order to use year end depreciation tax advantages.”

However you slice it, those monstrous gains are huge for the machine tool industry as a whole. Normally I’d say this is a good sign that the industry on its way back after the recession, but when you post a month-over-month gain of 99 percent, you’re already back. Apparently, that’s where some of our equipment financing requests are going.

Do you work in or work with those in the machine tool industry? Give us your reaction to the news.

Photo credit to noir at http://www.sxc.hu/photo/99645

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