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  1. Cutting Tools

Cutting Tool Demand Weakening, Again

Sept. 23, 2020
July consumption figures reveal consumption fell -8.5% from June to July, and more than -20% YTD, as U.S. manufacturers seek to steady their tool inventories for an uncertain economic rebound.

U.S. machine shops and other manufacturers consumed $137.8 million worth of cutting during July, -8.5% less than during June and -30.6% less than during July 2019. As cutting-tool consumption is reflective of overall manufacturing activity, the figures represent the seasonal dip that is common in many industrial sectors during the summer months, but also the decline in industrial demand resulting from coronavirus-related shutdowns.

AMT/USCTI
A graph comparing the 12-month moving averages for durable goods shipments and cutting tool orders, demonstrating the relation of cutting tools to manufacturing activity. The July 2020 consumption total of $137.8 million was up 10.1% from June's $150.6 million, but down -30.6% versus $198.5 million reported for July 2019.
A graph comparing the 12-month moving averages for durable goods shipments and cutting tool orders, demonstrating the relation of cutting tools to manufacturing activity. The July 2020 consumption total of $137.8 million was up 10.1% from June's $150.6 million, but down -30.6% versus $198.5 million reported for July 2019.

The data is provided by AMT – the Assn. for Manufacturing Technologies and the U.S. Cutting Tool Institute in their monthly Cutting Tool Market Report.

Through seven months of 2020, total cutting-tool consumption reported in the CTMR is $1.1 billion, meaning 2020 consumption is -21.2% less than during the January-June 2019 period.

The Cutting Tool Market Report presents cutting-tool consumption based on totals reported by participating companies, which represent the majority of the U.S. market for cutting tools.

AMT/USCTI
The month-by-month direction of cutting-tool consumption, July 2016 to July 2020. For the current year to-date, U.S. cutting-tool consumption stands at $1.1 billion, meaning 2020 is down -21.2% compared with the January-July 2019 period.
The month-by-month direction of cutting-tool consumption, July 2016 to July 2020. For the current year to-date, U.S. cutting-tool consumption stands at $1.1 billion, meaning 2020 is down -21.2% compared with the January-July 2019 period.
“The July data shows a slight decline as the cutting tool industry’s major customers have returned to work from the pandemic shutdown," according to Brad Lawton, chairman of AMT’s Cutting Tool Product Group. "This is likely due to customers seeking to deplete existing tool inventories and adjust to the uncertainty of domestic and global markets before placing new orders. It is clear that the climb to better sales volumes will be extended and bumpy.”