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Cutting-Tool Orders Took Another -10% Drop

Jan. 26, 2021
The pandemic’s effects on manufacturing are evident again in the November cutting-tool consumption data, though industry experts see evidence of recovery in progress.

U.S. machine shops and other manufacturers purchased $151.3 million worth of cutting tools during November 2020, dropping -9.9% from the October purchase volume and -20.0% from the November 2019 level. For the 11 months from January to November 2020, U.S. cutting-tool orders totaled $1.7 billion, or -22.7% less than the comparable figure for 2019.

The data is compiled by AMT – the Assn. for Manufacturing Technology and the U.S. Cutting Tool Institute in their jointly issued Cutting Tool Market Report.

"The year-over-year numbers reflect what we are seeing in our business and hearing from the metalworking industry in general,” according to Chris Kaiser, executive advisor to Big Kaiser, a cutting-tool supplier. “We see the effects of the pandemic again in this month's report, but there is some improvement over the lows of last summer.”

The CTMR presents cutting-tool consumption as an indicator of overall manufacturing activity, as cutting tools are used in production of components used by virtually every industrial sector. The consumption totals are reported by participating companies that represent the majority of the U.S. market for cutting tools, and the wide application of cutting tools across multiple industries is comparable to durable-goods orders, according to the report's authors.

“In general, orders for consumable products for ongoing production are faring better than new capital equipment,” Kaiser offered, “but low interest rates, relatively easy access to capital and another round of PPP for small companies under 300 employees, might help speed up this recovery for 2021.”

“As we know the cutting-tool industry is dependent on the health of the nation's manufacturing economy, and we see recovery is in process,” commented Brad Lawton, chairman of AMT’s Cutting Tool Product Group. “The industry numbers reflect the usual year-end fluctuations, but in general there is optimism for continued recovery.”

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