First Down, Last Up

Machine-tool makers say their business is the "first to feel a recession, the last to recover." Back in January 1956--when the rest of the U.S. economy was still going up--machine-tool orders began skidding from their boom level of $125 million a month. Last week signs appeared that they were on the upturn again.

After bobbing around in the low $20 millions all winter, new domestic orders for metal-cutting and shaping tools briefly hit $29.8 million in March (caused by bunching up three large orders that normally would have been spread over a quarter), dropped to $20.8 million again in April, in May jumped to $23.7 million. To economists, who scan toolmakers' order books for a tip-off to future spending plans of a wide range of manufacturers, even such slight changes are encouraging.

The pickup is still too new to be apparent to all toolmakers. For the first five months of this year, Detroit's Cross Co. (automated assembly equipment) was 3% to 5% ahead of 1957, and the pace continued during June. Cleveland's National Acme Co. (automatic machine and threading tools) said that June orders were 50% over May.

But a good many toolmakers want to see more proof. Said an officer of the Atlantic Machine Tool Works serving the Hartford area: "Sure, the tool business in Connecticut is looking up. When you are flat on your back, where else can you look but up?" Pratt & Whitney Co.'s machine-tool plant at West Hartford says that employment is still off 25% from September. Not until general business improves will the tool business really hum.

One thing that holds up orders is a tug of war between toolmakers and their customers over price. Since the last general rises in 1956, makers have not changed listed prices. But a lot of secret deals are being made. Said Greenlee Brothers & Co. of Rockford, Ill. (metal and wood working tools): "In the last few weeks we've had more inquiries about orders than in the previous five months. From all the haggling over price, obviously prices are being shaved all around."

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