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Experts Cautious About Cutting Tool Demand

June 13, 2024
The latest index shows manufacturing activity has risen year-over-year and year-to-date, but “uneven growth and turbulence” continue to impact cutting tool demand, and some downgrades in future requirements have led to stagnation in new orders.

New data on U.S. cutting-tool consumption is generally positive, with new orders rising in the latest monthly summary and trending upward for the year-to-date – but observers remain cautious with their outlook. During April, according to the Cutting Tool Market Report, U.S. machine shops and other manufacturers purchased $214.7 million worth of cutting tools, 1.1% more than the March total and 13.0% more than the April 2023 result.

For January-April 2024 period, cutting tool suppliers report total shipments worth $846.1 million, almost 5% more than the comparable total during the first four months of 2023.

“While April 2024 shipping numbers do show an increase from those of 2023, caution continues due to many uncertainties ahead for the remainder of 2024,” explained U.S. Cutting Tool Institute president Steve Boyer. “Uneven growth and turbulence have continued to impact cutting tool orders through the first quarter of 2024, and there have been some downgrades in expected needs from the aerospace sector, leading to stagnation in new orders.”

The CTMR is a joint effort of AMT - the Assn. for Manufacturing Technology and USCTI. Data in the report summarizes purchases by companies who comprise the majority of the U.S. market for cutting tools – whose customers are contract machine shops (job shops) and OEMs for whom cutting tools are significant consumable. Their demand for cutting tools closely matches U.S. durable goods shipments as a measure of production activity.

Cutting-tool purchases are an indicator of overall manufacturing activity because those purchases reflect production across a range of manufacturing market segments served by machining operations.

Jarvis Cutting Tools president Costikyan Jarvis observed that “the industrial sector of the economy continues to move sideways. While the value of cutting tool shipments is up about 5% over last year, the flatter growth rate in units shows that inflationary pressures are still present.”