U.S. manufacturers consumed $170.95 million worth of cutting tools during July, falling 8.4% behind the level for June but still 16.0% higher than the July 2016 consumption. At $1.266 billion for January-July consumption, 2017 YTD consumption is up 7.1% versus 2016.
Cutting tools are one of the principle consumable products for manufacturers — machine shops and others — offering a quantifiable index to the current state of manufacturing activity, comparable to durable goods shipments.
AMT / US Cutting Tool Institute
Each month the U.S. Cutting Tool Institute (USCTI) and AMT – the Association for Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report (CTMR), based on figures reported by participating companies that represent the majority of the U.S. market for cutting tools.
“The cutting tool industry certainly is on a pace to exceed 2016 totals,” stated Brad Lawton, chairman of AMT’s Cutting Tool Product Group. “With the continuation of strong domestic economic growth, there is a potential recovery to the industry levels of 2015.”
As for the decline in consumption from June to July, that slowdown appears comparable the drop in new orders for machine tools revealed in the most recent U.S. Machine Tools Order report, also issued by AMT.
However, the USMTO is an index to future manufacturing activity. In the latest USMTO report, the June-to-July decline was described as a typical mid-summer variation, and in line with the continuing year-over-year expansion in domestic manufacturing. That trend applies to cutting-tool consumption, too, the CTMR sources assured.
“Cutting tool demand continues its moderate recovery though the monthly data remains volatile,” according to Eli Lustgarten, senior vice president at Longbow Securities, and an expert cited by AMT. “While July 2017 consumption showed a seasonal decline of 8.4% from June, results were 16% above the comparable month a year ago.
“Year–to-date consumption is up 7.1% and appears to be mostly demand-driven, with some modest restocking helped by the current moderate improvement in both on and off-highway markets, including a recovery in the mining and oil-and-gas sectors,” Lustgarten continued. The analyst predicted cutting-tool demand would continue its current, moderate recovery for the remainder of 2017, despite somewhat tougher monthly comparisons and the ongoing modest recovery in manufacturing industrial production, which is up 1.2% year to date.”