U.S. manufacturing indicators reveal growth through December

UPDATED on Jan. 25, 2021

As the overall U.S. manufacturing industry continued to rebound in November 2020, the cutting tool sector found itself on the downside of an economic rollercoaster. That said, optimism for the year ahead continues to grow.

According to the latest Cutting Tool Market Report (CTMR) — released Jan. 22 — U.S. cutting tool consumption in November totaled $151.3 million, a 9.9% drop from the previous month. The October CTMR of $167.9 million represented a 7.6% gain over September and two consecutive months of growth. Cutting tool consumption grew 14.7% from August to September.

The overall manufacturing industry, meanwhile, notched its sixth consecutive month of expansion with a reading of 57.5 in November, according to the Manufacturing Purchasing Managers Index (PMI) compiled by the Institute for Supply Management's Manufacturing ISM Report on Business. What's more, the expansion streak reached seven consecutive months with a December PMI of 60.7. [A reading of 50 or above indicates expansion, while a reading below 50 indicates decline.]

The CTMR, which is produced by the U.S. Cutting Tool Institute (USCTI) and AMT – The Association For Manufacturing Technology, trails the latest PMI report by one month.

“As we know, the cutting tool industry is dependent on the health of the nation's manufacturing economy, and we see recovery is in process," said Brad Lawton, who chairs AMT’s Cutting Tool Product Group. "The industry numbers reflect the usual year-end fluctuations, but in general there is optimism for continued recovery."

Timothy R. Fiore, who chairs the ISM Manufacturing Business Survey Committee, noted that while the manufacturing economy continued its recovery in December, survey committee members reported that their companies and suppliers continue to operate in reconfigured factories with absenteeism, short-term shutdowns and other difficulties "causing strains that will likely limit future manufacturing growth potential."

That said, Fiore reported a more optimistic outlook. "Panel sentiment," he said, "remains optimistic (three positive comments for every cautious comment), an improvement compared to November."