Cutting Tool Results Shows Manufacturing's Weakness

U.S. manufacturers consumed $189.1 million worth of cutting tools during November 2019, -12.6% from the October 2019 result and -9.7% from November 2018. The results, as reported by the U.S. Cutting Tool Institute and AMT – the Assn. for Manufacturing Technology in their monthly Cutting Tool Market Report, suggest the slower state of overall manufacturing activity in the second half of the past year.

CTMR presents cutting-tool consumption as an indicator of U.S. manufacturing activity, as it is a true measure of actual production levels. The figures are based on the totals reported by the participating companies and represent the majority of the U.S. market for cutting tools.

The CTMR data contrasts with AMT's U.S. Manufacturing Technology Orders report, which measures machine-tool orders as a leading indicator of future manufacturing activity.

“The CTMR did not drop off as significantly as machine-tool orders in 2019 but was on a downward trend for most of the year and remained in negative territory," according to Chris Kaiser, CEO of cutting-tool manufacturer Big Kaiser.

"We should see an upturn in December compared to the previous month as year-end budgets are expended. I’m actually surprised orders are as close to 2018 levels as they are, and that may be due to relatively high capacity utilization rates in many industries,” Kaiser added.

With the results from November, the 2019 year-to-date total for cutting-tool consumption rose to $2.3 billion, down -1.1% compared with the 11-month result for 2018.

According to Brad Lawton, chairman of AMT’s Cutting Tool Product Group: “The Cutting Tool Industry has been managing through declining sales volumes for 2019. The economic forecasts indicate that this trend will continue into 2020. However, the recent progress that has been accomplished with trade agreements could improve economic activity.”