Five percent growth for '98
By Staff -- Industrial Distribution, 8/1/1998
Cutting tool markets continue to gleam with worldwide growth expected to reach five percent by the year's end.The total market is estimated at nearly $9 billion by the U.S. Cutting Tool Institute, including about $2.5-$3 billion in North America alone. Revenue growth in 1998 should roughly match last year's pace, says USCTI executive director Charles Stockinger.
"It's going to be tapering off as we move forward a little bit -- once we get a year or two beyond...the expectation is the market will be somewhat less dynamic," he says.
Frost & Sullivan, a private research firm in Mountain View, Calif., offers a slightly different forecast. The firm expects the rate of revenue growth in metal cutting tools worldwide to decline slightly from 5.4 percent this year to 4.2 percent by 2003. Frost & Sullivan, which values the market at about $16 billion, expects it to reach nearly $22 billion in five years.
The firm expects domestic revenue growth to drop to about three percent this year, reach 3.3 percent by 2001, and then decline. Faster operating carbide tools are gaining popularity over steel tools, while diamond and cubic boron nitride abrasives get used more often in grinding, the report says.
Meanwhile, Frost & Sullivan projects the highest growth areas to be Eastern Europe, South America and the Far East, with the Far East eventually developing as the center of worldwide metalworking activity. Sales across Europe have grown more than 40 percent during the past five years.
"Globally, we see North America having steady growth in the years ahead and Europe having turned around substantially this year and moving ahead," says Jim Christie, president of Valenite Inc. in Madison Heights, Mich. "Given the present trends in Asia it will take a bit longer...We still see it as a growth area and it still has potential but we see it further down the road."
Christie, who gave a presentation on metal cutting trends at the USCTI's World Conference this spring, says that in addition to the growing popularity of carbide tools, there is increasing demand for coatings, particularly those with a physical vapor deposition (PVD) classification, followed by PCD, CBN and diamond coatings.
Major established manufacturers continue to lead consolidation in the industry, he says. While the rapid growth in carbide tools is clear to see, Christie says gains in coatings sales are harder to quantify. Those are more dependent on highly-specialized applications developed by manufacturers. "The real driving force is the extended life you get with carbide products, although [they] may cost a little more," he says.
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