How much does the 'Notched Pickaxe' Improve Smithing?
Solution 1:
I just climbed Skyrim's tallest mountain for you. The notched pickaxe increases smithing by five.
It is not leveled loot, and does not stack.
Solution 2:
Under active effects it says that it increases your smithing skill by 5. As far as I can tell, it doesn't - My Daedric Armor goes from 90 to 120 armor after workbenching it, regardless if I have the pickaxe equipped or not. My smithing level remains at 90, equipped or not. Conclusion: Either they removed the buff while keeping the text in the latest patch, or it only gives you smithing if your smithing is low.