Consumption of cutting tools by U.S. manufacters and machine shops fell to $177.5 million in July, down 5.9% from $188.7 million reported for June, and down 5.6% from the July 2014 total. The result is drawn from the monthly Cutting Tool Market Report (CTMR) compiled by the U.S. Cutting Tool Institute (USCTI) and AMT – The Association For Manufacturing Technology.

Cutting tool consumption is offered as an index to overall manufacturing activity, comparable the monthly purchasing managers’ index of durable goods.

The report presents figures for consumption based on actual totals reported by companies participating in the CTMR program, who represent the majority of the U.S. market for cutting tools.

“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,” according to the report’s sponsors.

The current monthly decline represents the fifth month (out of seven) this year of falling consumption. The more indicative trend is the falling year-over-year consumption total, which reflects broader U.S. manufacturing trends.

“Caution is the condition of the month as we note the flat to declining cutting tool market performance,” according to Brad Lawton, chairman of AMT’s Cutting Tool Product Group. “Changing currency values coupled with low oil prices support these conditions, with an outlook for improvements in the fourth quarter.”