U.S. machine tools orders dropped precipitously in January to start off the New Year with a whimper. Domestic machine tool orders totaled $341.17 million and dropped 32.9% from December and -4.8% from the January 2014. The January numbers show that 1,637 machines were sold nationwide.

Some slack is expected in the first month of the New Year as “manufacturers frequently seek to record capital purchases within an expiring tax year,” according to Rob LaFrentz and Robert Brooks of American Machinist.

The sharp drop in U.S. machine tools orders at the end of 2014 plus the slack results in January of the New Year suggest a soft market for machine tool manufacturers last year with the exception of a gonzo September that took place during IMTS 2014.

This data is pulled from the U.S. Manufacturing Technology Orders (USMTO) report compiled by the trade group Association for Manufacturing Technology (AMT) that studies domestic and imported metal-cutting equipment based on new orders from participating manufacturers.

AMT’s USMTO report is important because it “acts an index of confidence by manufacturing businesses, based on their business volumes and expansion plans,” according to LaFrentz and Brooks in American Machinist.

AMT President Douglas K. Woods soft-pedaled the soft U.S. machine tools sales numbers:

 To understand why we saw this drop in order for January, December 2014 saw a sharp increase in sales. This was driven by many end-of-the-year orders that had been rushed through in order to qualify for tax rebate provisions that were enacted at the last minute for 2014. This is evidenced by the comparatively lower average order value seen in December versus January, meaning that most en-of-the-year orders were for less expensive, in-stock machines that could be shipped quickly. This decline wasn’t unexpected, and we still foresee the manufacturing economy keeping on a stable path.

The USMTO reports draws on the sales of metal-cutting, metal-forming and metal-fabricating machines in six geographic regions of the United States. The Northeastern U.S. region performed the strongest with a 2.2% increase in machine tool orders from December 2014.

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