U.S. machine shops and other manufacturers consumed $163.5 million worth of cutting tools during August, only slightly more (+0.7%) than the July consumption total but 27.4% more than the August 2020 total. The strong, but not growing, consumption rate confirms the growing sense that supply-chain inefficiencies are limiting manufacturing growth.
The same conditions were cited by AMT – the Assn. for Manufacturing Technology in its recent summary of machine-tool new orders, a forward-looking index to manufacturing activity.Because cutting tools are required in the production of a wide variety of parts and components supplied to a range of industrial sectors, cutting-tool consumption is taken as an index of current manufacturing activity, comparable to shipments of durable goods. Through eight months of 2021, U.S. cutting-tool consumption totals $1.3 billion, +7% higher than the January-August total.
“Although year-over-year growth in the cutting-tool sector for April through August has been robust, we remain well below 2019 levels,” commented U.S. Cutting Tool Institute president Bret Tayne. “Our growth path remains uneven, and steadier improvement is frustrated by policy and other factors. That said, colleagues, supply chain partners, and end-user customers that I have spoken to recently seem to be universally confident in the near term.”
USCTI and AMT – the Assn. for Manufacturing Technology provide cutting-tool consumption data in their monthly Cutting Tool Market Report.The CTMR presents real-time data on cutting-tool consumption supplied by a majority of the U.S. market for cutting tools.
Pat McGibbon, chief knowledge officer for AMT, emphasized that, “the outlook for cutting tools is bright.
“Cutting tool shipments' year-over-year moving average has been 24% over the past four months, and machine tool orders are up 48% year-to-date from 2020 levels,” McGibbon noted. “We see the severe difference in growth rates between consumables and equipment as a reflection of the challenge downstream customers are having in securing materials and parts to machines. It is just a matter of time before these bottlenecks break loose.”