U.S. machine shops and other manufacturers increased their consumption of cutting tools again in March, rising 6.2% from February’s total to $184.08 million. It was the second straight increase in the monthly Cutting Tool Market Report, jointly compiled and issued by the U.S. Cutting Tool Institute (USCTI) and AMT - the Association for Manufacturing Technology.
Cutting tools (e.g., drills, countersinks, taps, milling cutters, boring bars, and indexable inserts, among others) are the high-value consumable parts used in machine tools to shape raw material into finished or semi-finished parts, or to remove excess material from existing parts. Because tools must be replaced relatively frequently during manufacturing processes, cutting tool shipments can be seen as an index to overall manufacturing activity, similar to manufacturers’ shipments of durable goods.
The CTMR presents actual data on the total value of cutting tools consumed by U.S. businesses, based on data supplied by participating companies. Those companies represent the majority of the U.S. market for cutting tools, according to the report’s sponsors.
The CTMR contrasts with AMT’s monthly U.S. Manufacturing Technology Report, which portrays manufacturers’ investments for future activity.
Although the latest report indicates growing manufacturing activity, the March result fell 7.9% below the March 2015 CTMR total ($199.89 million), and the year-to-date total of $516.12 million, is 8.5% less than the January-March 2015 result.
“The cutting tool industry seems to be on its current plateau, which shows slow sales volume improvements for the last four months. Improvements in the domestic economy and international markets are necessary to establish growth in our industry,” stated Brad Lawton, chairman of AMT’s Cutting Tool Product Group.
In their release, AMT and USCTI noted that while cutting tool shipments during March reached the highest total in nine months, the level continued to fall behind the year-ago rate. However, it also pointed out that some leading indicators for metalworking industry demand (e.g., interest rates, exchange rates, and housing permits) have been improving in recent months, suggesting that the rising shipment total may be a reliable trend.