MCLEAN, Va. -- Orders for industrial tools rose 5.11 percent in May from the previous month as foreign demand surged, Association of Manufacturing Technology figures showed.
Economists monitor orders and shipments of machine tools -- used to shape and assemble metal in products ranging from diesel engines to washing machines -- as a way to gauge industrial output, consumer demand, and business investment.
The AMT figures showed that while orders from domestic customers fell 3.0 percent in May, the second consecutive monthly decline, demand from abroad climbed 80.8 percent during the month.
"Exports continue to drive growth in new machine tool sales," said Albert W. Moore, president of the trade association.
Foreign demand isn't strong across the board, however. A report released last week by the Commerce Department showed that U.S. exports fell in April for the first time this year.
Other recent government data suggest that the U.S. economy is slowing under the weight of seven Federal Reserve interest-rate increases aimed at preventing accelerated inflation.
Pared auto production caused output at U.S. factories to fall in May for the third consecutive month -- the first time that's happened since the 1991 recession. Moreover, manufacturers and construction companies laid off more workers than they hired in May, while starts of new housing during the month fell a surprising 1.3 percent as builders struggled to sell a glut of new homes.
"If the decline in domestic demand continues for quite some time, it would be troubling," said Charles Pollock, an AMT spokesman. Still, "We are getting reports from some members that they are busier than ever," he said.
Bolstering the view that the economy could rebound later in the year, Commerce Department figures showed that U.S. factory orders for big-ticket goods reversed a four-month slide, rising an unexpected 2.5 percent during May as orders for jetliners offset sluggish demand for autos.
In May, machine tool orders increased to $387.1 million after falling 36.2 percent to $368.3 million during April. Previously, April orders were reported to have fallen 42.0 percent. Compared with a year earlier, machine tool orders climbed 19.9 percent last month.
By category, orders for metal cutting tools, such as drills, fell 13.1 percent to $215.7 million while orders for metal forming tools, such as stamp press machines, rose 42.6 percent to $171.4 million last month.
Meanwhile, machine tool shipments increased 5.9 percent in May to $382.6 million.
The backlog of orders, which tracks pent-up demand for tools, rose 0.2 percent, to $2.430 million.