MCLEAN, VA — January 2021 US cutting tool consumption totaled $152.2 million, according to the U.S. Cutting Tool Institute (USCTI) and the Association for Manufacturing Technology (AMT). This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was down 3.2 percent from December's $157.3 million and down 21.8 percent when compared with the $194.8 million reported for January 2020.
These numbers and all data in this report are based on the totals reported by the companies participating in the CTMR program. The totals here represent the majority of the US market for cutting tools.
According to Brad Lawton, chairman of AMT’s Cutting Tool Product Group, “January shipments levels are better than the dismal numbers in May 2020 but don’t reflect a recovery in Q1 business levels either. However, I expect a recovery to begin in our industry soon as the government stimulus translates into greater manufacturing levels early in 2021.”
“The outlook is looking brighter for cutting tools, but the road to a full recovery remains long. In January, cutting tool shipments were 22 percent lower than last year despite durable goods shipments being 6.2 percent year-over-year higher than in January 2020. Improving health conditions, expanding vaccine distribution, and generous fiscal stimulus will form a powerful cocktail that lifts economic activity this year. A softer U.S. dollar and rebounding global growth should further contribute to the sectoral tailwinds. Looking further ahead, policy risks are tilted to the upside with President Biden’s Build Back Better plan potentially adding $2 trillion in government spending on infrastructure, climate change initiatives and R&D over the next 10 years,” commented Greg Daco, Chief US Economist at Oxford Economics USA.
The Cutting Tool Market Report 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.
Historical data for the Cutting Tool Market Report is available dating back to January 2012. This collaboration of AMT and USCTI is the first step in the two associations working together to promote and support U.S.-based manufacturers of cutting tool technology.
The graph below includes the 12-month moving average for the durable goods shipments and cutting tool orders. These values are calculated by taking the average of the most recent 12 months and plotting them over time.