U.S. Cutting Tools Orders Down

July U.S. cutting tool consumption totaled $146.95 million according to the U.S. Cutting Tool Institute (USCTI; Cleveland, OH) and AMT – The Association for Manufacturing Technology (McLean, VA. This total, as reported by companies participating in the Cutting Tool Market Report (CTMR) collaboration, was down 16.2 percent from June’s $175.35 million and down 17.2 percent  when compared with the total of $177.51 million reported for July 2015. With a year-to-date total of $1,177.75 million, 2016 is down 9.9 percent when compared with 2015.

These numbers and all data in this report represent the majority of the U.S. market for cutting tools. “The Cutting Tool industry has been waiting for the opening bell of IMTS 2016 with anticipation of many new opportunities to break the current Industry trend and we’re excited that it’s finally here.  Will it happen or will the declining trend continue through the end of 2016?” asked Brad Lawton, the chairman of AMT’s Cutting Tool Product Group. “We will have the answer before the start of next month.”  

“Cutting tool demand took a sharp downturn in July, even adjusted for seasonality. Demand has fallen for 15 months in a row, with the latest weakness likely driven by the sluggish first half of 2016’s economic growth and the recent surprise contraction of the ISM Purchasing Managers Index (PMI). We are also hearing of more inventory reduction to align stock levels with current weak demand that is expected to remain lower for longer,” added Eli Lustgarten, the senior vice president at Longbow Securities. “Expect more of the same for the remainder of 2016, with some moderation of the decline because of much easier comps starting in September.”

“Cutting tools are an important market for AMT members to track because tooling consumption correlates strongly with manufacturing output,” noted Patrick McGibbon, the vice president of Strategic Analytics for AMT. The CTMR is jointly compiled by AMT and USCTI, two trade associations representing the development, production and distribution of cutting tool technology and products. It provides a monthly statement on U.S. manufacturers’ consumption of the primary consumable in the manufacturing process – the cutting tool.  Analysis of cutting tool consumption is a leading indicator of both upturns and downturns in U.S. manufacturing activity, as it is a true measure of actual production levels.

www.uscti.com, www.AMTonline.org