U.S. manufacturers purchased $208.27 million worth of cutting tools during January, 10.1% ahead of the total for December 2018, indicating sustained strong industrial demand following two months of falling purchase totals. Cutting tool purchases, or consumption, Cutting-tool consumption (i.e., purchases) is an indicator of manufacturing activity, as cutting tools are the "primary consumable" in manufacturing activities, according to the monthly Cutting Tool Market Report.
The January total also represents a 13.4% rise over the January 2018 CTMR total.
The monthly CTMR is compiled by AMT - the Assn. for Manufacturing Technology and the U.S. Cutting Tool Institute (USCTI) from actual cutting-tool consumption data reported by participating companies that represent the majority of the U.S. market for cutting tools.
“As the cutting tool industry starts 2019, the review of 2018 shows a good growth of 13%,” commented Brad Lawton, chairman of AMT’s Cutting Tool Product Group. “The reasonable question for all is, ‘Will 2019 continue to show the economic strength or will the forecasts come true with an end of year slowing?’
“The cutting-tool industry has done well in spite of material-cost increases, labor shortages, and global trade unrest, and we are poised to continue,” Lawton added.
Future challenges for cutting-tool consumption may be indicated by AMT’s separate monthly report, the U.S. Manufacturing Technology Orders report, an index of near-term sectoral activity based on machine shop’s capital investments. That index has shown declining CapEx for four consecutive months.
“Cutting tool consumption continued at high levels in January 2019,” according to to Eli Lustgarten, president of ESL Consultants, a sectoral-focus forecasting group. “Demand is consistent with recent Institute of Supply Management’s Purchasing Managers Index of 56.6 and 54.2 in January and February ,which suggests a moderating but firm manufacturing sector in the first half of 2019.
“However, storm clouds continue to be visible with automotive and housing demand slowing, volatile energy and commodity prices, ongoing trade tensions and the unfolding global economic slowdown particularly in China and the EU,” Lustgarten continued. “Comparisons will get tougher as the year progresses with orders likely to trail shipments. This sets the stage for a slower second half of 2019 into 2020 without some positive economic stimulation.”