Machine Shops NAICS 332710

May 18, 2026 - Cutting Tool Shipments Rise

• Cutting tool shipments totaled $225.1 million in February, up 12.8% compared to a year ago and an increase of 2% from January, according to the latest Cutting Tool Market Report (CTMR). With a January-February cumulative total of $445.8 million, cutting tool shipments are up 11.3% year-to-date, per the report. The rise in shipments is a positive sign for US machine shops and the broader manufacturing sector because it usually means more work is coming in. Demand is being driven by strong activity in construction equipment, defense, and aerospace, all industries that rely heavily on machining. By comparison, some key markets for machine shops like automotive, heavy trucks, and medical equipment are still lagging, so demand isn’t strong across the board. Moreover, machine shops are dealing with higher raw material costs and ongoing supply uncertainty, which can erode shop profit margins.
• Economic activity in the manufacturing sector, a driver of demand for machine parts, expanded in March for the third straight month, following a 10-month period of contraction, according to the nation's supply executives in the latest ISM Manufacturing PMI Report. In March, the Manufacturing PMI registered 52.7%, a 0.3-percentage point increase compared to February’s reading of 52.4%. Of the five subindexes that make up the PMI, the New Orders Index indicated slower growth compared to February, the Production Index grew at a faster rate, and the Employment and Inventories indexes remained in contraction. March was the first report with supply executives citing the Iran war as a new impact to their business, along with ongoing uncertainty with US economic policy, despite the recent Supreme Court ruling striking down International Emergency Economic Powers Act (IEEPA) tariffs.

• With many experienced machinists nearing retirement and new skilled candidates difficult to find through traditional recruiting channels, US machine shops are looking for opportunities to boost the CNC machining workforce, Modern Machine Shops reports. Educational programs to address the machining workforce shortage include: Machining AdvantEdge, a provider of free training and bootcamps that teach modeling-based machining strategies to improve productivity and programming efficiency; TechAM develops technician-engineer “technologists” who can lead advanced manufacturing initiatives, helping shops adopt automation, robotics, and digital manufacturing; MSC Collaboratory connects schools with industry tools, training, and technology to better prepare students for real shop-floor work; and lastly, Laborup, which uses AI to match employers with skilled machinists by focusing on practical shop-floor skills rather than resumes. Together, these programs help machine shops address labor shortages, build stronger training pipelines, and improve hiring and retention of CNC talent, per MMS.
• Producer prices for machine shops rose to a new high in March, up 2% compared to a year ago, after rising 2.3% in the previous March-versus-March annual comparison, according to the latest US Bureau of Labor Statistics data. The Producer Price Index for machine shops, which has been rising steadily since mid-2021, is at a record high level due to a combination of strong demand and input cost inflation. Employment by machine shops continued its downward trend in February, dipping by 0.6% year over year, while the average industry wage rose 2.2% over the same period to a new high of $28.59 per hour, BLS data show. Machine shops are taking a cautious approach to hiring amid inflationary pressures.