Cutting tool consumption, manufacturing indicators up in December

The U.S. manufacturing industry continued to rebound in December 2020 with cutting tool consumption up 4% over November and the Manufacturing Purchasing Manager's Index (PMI) expanding from 57.5 in November to 60.5 in December. 

The Cutting Tool Market Report (CTMR) for December 2020, released today by the U.S. Cutting Tool Institute (USCTI), reports cutting tool consumption for the month at $157.3 million. The CTMR is produced through a collaboration between USCTI and AMT – The Association For Manufacturing Technology.

"The most recent data from cutting tool manufacturers support and extend the modest recovery we experienced in the last four months of 2020, despite weaker reports for the month of November," USCTI President Bret Tayne said in a Feb. 15 CTMR news release. "The recovery is uneven, to be sure. Some sectors of the cutting tool user base may not recover for an extended period of time, but the overall market data is improving."

Though CTMR month-to-month data (charted below) finished the year on an uptick, annual cutting tool consumption in 2020 was down about 22% from the previous year. Cutting tool consumption ended 2020 at $1.9 billion, while the year-end total for 2019 was $2.4 billion. 

"While we have all experienced a dramatic decline in business," noted Kyocera SGS Precision Tool President Tom Haag, "it appears as though we have turned the proverbial corner and the coming first quarter tends to be strong in our industry. If automotive supply can keep continuity, this improvement should continue."

The overall manufacturing industry, meanwhile, notched its eighth consecutive month of expansion with a January 2021 PMI reading of 58.7, according to the Institute for Supply Management's Manufacturing ISM Report on Business. [A reading of 50 or above indicates expansion, while a reading below 50 indicates contraction.]

Also, manufacturing's portion of the U.S. Gross Domestic Product was more than $2.33 billion for the third quarter of 2020. That's only slightly below the $2.35 billion reported in the third quarter of 2019. And a sign that bodes well for manufacturing's fourth-quarter results: the overall GDP grew from $21.17 trillion in the third quarter of 2020 to $21.48 trillion in the fourth quarter, according to the U.S. Department of Commerce Bureau of Economic Analysis.