U.S. machine shops’ and other manufacturers’ purchases of cutting tools fell to $205.6 million in February, down -4.4% from January, the third decline in the past four months for the consumption index that is a gauge to overall manufacturing activity. However, the February data also shows an 8% increase over the February 2018 total, $190.3 million, and the 2019 year-to-date total of $420.7 million is up 13% when compared with 2018.
“The 8% year-over-year increase posted in February reflects the continuing strength in the U.S. manufacturing base,” stated Phil Kurtz, president of the U.S. Cutting Tool Institute (USCTI), one of two trade associations that maintains the monthly Cutting Tool Market Report. “We are hearing of signs that the market’s growth rate may slow later this year but February’s results are getting the year off to a good start.”
The CTMR is compiled by AMT - the Assn. for Manufacturing Technology and USCTI from actual cutting-tool consumption data.
Cutting tool are a "primary consumable" in manufacturing activities, the CTMR’s sources maintain, making cutting-tool purchases an indicator of manufacturing activity, comparable to the monthly Purchasing Managers’ Index reported by the Institute for Supply Management.
In their February release, the report sources noted that “leading manufacturing activity indicators point to healthy, but gradually cooling momentum in 2019."
According to Greg Daco, chief U.S. economist at Oxford Economics cited by the CTMR sources: “Cutting tool shipments are off to a solid start in 2019, bucking the trend of cooler momentum in the broader durable goods category. A very solid, 13% gain in year-to-date cutting-tool shipments through February puts the category well ahead of the healthy 6% year-to-date rise in overall durable goods shipments."
He continued: "Leading manufacturing activity indicators point to healthy, but gradually cooling, momentum in 2019. Slower global growth, lingering trade tensions, and reduced fiscal stimulus will weigh on growth, while elevated private-sector confidence, a solid labor market, and a more dovish Fed (will) support activity.”