For Immediate Release: October 21, 2020
Susan Orenga, USCTI, 216-241-7333
August 2020 U.S. Cutting Tool Orders Down 0.2% from July 2020
August 2020 U.S. cutting tool consumption totaled $136.1 million, according to the U.S. Cutting Tool Institute (USCTI) and AMT – The Association For Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was down 0.2 percent from July's $136.3 million and down 33.5 percent when compared with the $204.7 million reported for August 2019. With a year-to-date total of $1.3 billion, 2020 is down 23.4 percent when compared with August 2019.
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 U.S. market for cutting tools.
According to Bret Tayne, President of USCTI, “Sales of cutting tools declined more than might have been anticipated through the summer months. However, in light of the reports of flattening growth in both manufacturing and the broader economy, these statistics are not entirely surprising.”
"Cutting tool orders continue to remain soft in August 2020 but appear to have found a bottom. Orders of $136M were only -0.2% below July orders of $136.3M but were still -33.5% below August 2019. Year-to-date orders remain weak at down -23.4%. The weakness is a continuation of the order decline that began in the spring of 2019, impacted by inventory liquidation, and exacerbated by the Covid-19 pandemic which virtually shut down the U.S. economy,” commented Eli Lustgarten, President of ESL Consultants. He later added, “The good news is that U.S. manufacturing has now undergone over four months of improvement with the ISM PMI over 50 (Sept 2020 was 55.4) with the recovery led by automotive (largest buyer of cutting tools), appliances, electrical, and general manufacturing. Any improvement in demand will likely be moderate and volatile near-term reflecting the ongoing severe weakness in key markets such as aerospace and energy as well as uncertainty of the strength of economic growth after the big U.S. GDP rebound in Q3 2020.”
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.
# # #
The United States Cutting Tool Institute (USCTI) was formed in 1988 and resulted from a merger of the two national associations representing the cutting tool manufacturing industry. USCTI works to represent, promote, and expand the U.S. cutting tool industry and to promote the benefits of buying American-made cutting tools manufactured by its members. The Institute recently expanded its by-laws to include any North American manufacturer and/or remanufacturer of cutting tools, as well as post-fabrication tool surface treatment providers. Members, which number over 80, belong to seven product divisions: Carbide Tooling, Drill & Reamer, Milling Cutter, PCD & PCBN, Tap & Die, Tool Holder and All Other Tooling. A wide range of activities includes a comprehensive statistics program, human resources surveys and forums, development of product specifications and standards, and semi-annual meetings to share ideas and receive information on key industry trends.