The value of machine tool orders plunged in November as makers pared prices to cut inventory, according to a monthly report.
Orders totaled $320 million for the month, AMT – The Association for Manufacturing Technology said. That was down 15 percent from an adjusted $376.1 million for October.
AMT said the number of machine tool units only fell by 3 percent on a monthly basis.
That “reflects an aggressive move by sellers to reduce inventory before the end” of 2019, Douglas K. Woods, president of AMT, said in a statement.
“The dollar volume would have been lower if not for the growth in orders for complex machines as larger manufacturers returned to the workplace,” he added.
November orders were down 29 percent from the $452.7 million in the year-earlier month, according to AMT.
For the first 11 months, orders totaled $4.1 billion, a 19 percent decline from the $5.04 billion for the same period in 2018.
In 2018, the industry enjoyed robust business. It got the normal boost from AMT’s IMTS event in September 2018. Orders remained hot after IMTS until almost the end of the year.
“Given how strong a year 2018 was, current dollar volumes are still healthy compared to the average over the past 10 years,” Woods said.
The figures are based on information from companies participating in AMT’s U.S. Manufacturing Technology Orders (USMTO) program.
AMT said it expects orders to revive in the second half of 2020. The U.S. and China are expected to sign a first-stage trade deal on Jan. 15. That will include increased Chinese purchases of U.S. agricultural products. However, most Chinese imports remain subject to U.S. tariffs.
AMT’s Woods said the agreement “will lead to increased investment for agriculture equipment,” which would increase machine tool orders. Woods also said a pending U.S.-Canada-Mexico trade accord will increase North American trade and help orders.