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Cutting Tool Purchases Rose Significantly During February

April 13, 2016
Machine shops and other manufacturers increased their cutting tool consumption by 9.3% over January, indicating rising volume activity $173.38 million,  -4.0% y/y Contrast with capital investment "We should see the months continue to improve …"
The monthly Cutting Tool Market Report is an indicator of recent manufacturing activity, similar in its perspective to the U.S. Census Bureau’s monthly index to manufacturers’ durable goods shipments. "Cutting tools are an important market for AMT members to track because tooling consumption correlates strongly with manufacturing output," according to AMT’s Patrick McGibbon, v.p. - Strategic Analytics.

U.S. machine shops and other manufacturers consumed $173.38 million worth of cutting tools during February, increasing significantly the value of their total from the previous month, in an indicator of improving manufacturing activity. The result is 9.3% higher than January’s cutting-tool consumption total ($158.65 million) but still 4.0% less than the total ($180.56 million) reported for February 2015. 

The figures are drawn from the monthly Cutting Tool Market Report (CTMR), presented jointly by the U.S. Cutting Tool Institute and AMT – the Assn. for Manufacturing Technology.

Cutting tools 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. Examples drills, countersinks, taps, milling cutters, boring bars, and indexable inserts, among others.

Because tooling needs to be replaced relatively frequently during manufacturing processes, U.S. cutting tool shipments are a good measure of 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 report contrasts with AMT’s monthly U.S. Manufacturing Technology Report, which is an indicator of manufacturers’ investments for future activity.  While the February CTMR depicts a sharp rise in recent manufacturing activity, the February USMTO report continued to show slow growth in manufacturers’ capital investments.

“With a slow start to 2016 it is nice to see a stronger February,” stated USCTI president Steve Stokey. “2015 had a much stronger beginning and slower second half. It would appear that 2016 is shaping up as forecasted by most experts. We should see the months continue to improve and 2016 continuously gain on 2015 as the year progresses.” 

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