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U.S. machine-tool sales highest in 4 years

Sales of U.S. machine tools in 2004 will be the highest in four years with consumption poised to increase in 2005, two industry trade groups said in a report released on Sunday.
/ Source: Reuters

Sales of U.S. machine tools in 2004 will be the highest in four years with consumption poised to increase in 2005, two industry trade groups said in a report released on Sunday.

The American Machine Tool Distributors' Association and the Association for Manufacturing Technology said U.S. machine tool demand stood at $275.20 million in November, up 40.4 percent from $195.98 million in November 2003.

The November figure was 18.3 percent higher than October's $232.72 million. October demand was revised down from $234.44 million reported a month ago.

In the first 11 months of 2004, machine tool demand stood at $2.670 billion, up 43 percent from $1.867 billion in the same 2003 period, the data show.

Machine tools are used to shape metal for such products as car engines, refrigerators and television sets. Demand for these tools can provide a leading indicator of the pace of manufacturing.

"Pent-up demand, tax incentives and the need for increased capacity have caused U.S. manufacturers to continue their investment in new machine tools," Ralph Nappi, AMTDA's president, said in a statement.

Regionally, U.S. demand surged 92.1 percent in the South during November, 51.3 percent in the central region and 29.2 percent in the West.

Demand fell 8.2 percent in the Midwest and declined 5.7 percent in the Northeast.

"With year-to-date numbers running 43 percent ahead and all five regions showing positive growth, there appears to be a clear signal of continued strength in the industry," he said.

Last week the Labor Department reported a 3,000 gain in U.S. December factory jobs after three straight months of declines. Also, the Commerce Department revised U.S. November durable goods orders to a 1.4 percent rise from a previously reported 1.6 percent gain.

The machine tools report is generally based on a survey of about 200 manufacturers, distributors and importers of machine tools that represent 76 percent of the machine tool market.