Machining in US holds up

Despite economic and stock-market concerns in the US, machining for the tooling and machining industry continues there at a steady pace. According to machinery supplier Agie-Charmilles (Lincolnshire, Ill.), in August machine shops grew and the delinquency rate on machine tool leases dropped. The delinquency rate on machine tool leases was about one-sixth of the delinquency rate on home mortgages.

“I’m writing this monthly press release on September 15,” noted company chairman Harry Moser. “After the Dow dropped 504 points and Lehman Brothers declared bankruptcy, I was relieved to review the data and see that manufacturing has held up amazingly well in the face of the turmoil in housing and finance.”

The company’s Machining Business Activity Index increased to 62 in August from 59 in July. The Index is created by surveying machine tool users concerning their current business level versus three months earlier (i.e., May 2008). Any reading above 50 indicates that business activity has improved. Activity was strongest in the central region, and at medical and aerospace companies.

The related Agie Charmilles/USBEF Machining Industry Financial Strength Index strengthened to 417 in August 2008, from 400 in July 2008 and 55 in January 2002, the worst reading on record, but down from 588 in August 2007, the highest reading on record. The index has been slowly strengthening since 2007. Any reading above 100 indicates that US Bancorp Equipment Finance’s (USBEF’s) machine tool lease payment delinquencies (a good measure of machine tool users’ liquidity and consistent profitability) are at a rate below the average rate of 1990 to 1999.

The approximately 126,000 U.S. companies that use machine tools have about 2 million machine tools and 750,000 to 1,000,000 directly related employees (toolmakers, machinists, operators, programmers, etc.).

http://us.gfac.com/newsroom/businessindex/index.cfm, www.AgieCharmilles.us