Sun Jul 8, 2007 6:00PM EDT

WASHINGTON, July 8 (Reuters) - U.S. May machine tool demand fell 6.5 percent from the year-ago month but rose from April, two trade groups said in a report released on Sunday.

The American Machine Tool Distributors' Association (AMTDA) and the Association for Manufacturing Technology (AMT) said total U.S. May machine tool demand stood at $313.74 million, down from $335.52 million in May 2006.

May demand rose 6.5 percent from $294.46 million in April, the report showed.

In the January-to-May period, U.S. machine tool demand stood at $1.606 billion, up 7.5 percent from $1.494 billion in the first five months of 2006. Growth was strongest in the Central and Northeast regions.

"Growth this year, while less robust than in 2006, has now stabilized in the high, single-digit range," AMTDA President John Healy said in a statement. "In addition, each of the regions in the U.S. has shown growth in the first five months of 2007."

Demand for machine tools, which are used to shape metal for products such as car engines and refrigerators, can give a sense of the pace of manufacturing, as it reflects how much industries are investing in production equipment.

May demand for metal cutting and forming tools rose by 33.6 percent in the South and grew 17.9 percent in the Midwest. It was up 6.6 percent in the Central region.

Machine tool demand fell 24 percent in the West during May and was down 4.4 percent in the Northeast, the report showed.

On July 6 the Labor Department reported an 18,000 decrease in U.S. June factory jobs, marking 12 straight months of declines. The Commerce Department last week revised U.S. May durable goods orders to a 2.4 percent drop from a previously reported 2.8 percent decrease.

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.