Cutting Tools and Abrasives
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1 $1, MRO Market Profile: Cutting Tools and Abrasives ESTIMATED END-USER DEMAND IN THE U.S. BY REGION & END MARKET SAMPLE 2015 by Gale Media, Inc. All rights reserved. Material may not be reproduced in whole or in part in any form whatsoever without permission from the publisher. To request permission to copy, republish, or quote material, please call
2 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES Table of Contents Executive Summary p. 3 Est. Overall Market Demand p. 4 Total Demand by Product Category p. 5 U.S. Regional Market Analysis p. 6 Market Demand by U.S. State p. 7 Demand by End Market (2-digit NAICS) p. 8 Demand by Top 20 Manfacturing, Top 20 Construction and Top 10 Other MROP End Markets p MRO Product Profile p. 12 Report Methodology MDM Analytics uses a proprietary predictive model, first developed in 1985, that builds a total domestic market size estimate, based on U.S. Economic Census data at the 10-digit North American Industry Classification System (NAICS) product code level and factoring import/export data. This provides a reliable total market size estimate by specific product category. This total demand estimate is then segmented to allocate demand by industry classification, based on the 6-digit industry NAICS, which replaced the SIC code system in Dun & Bradstreet and other private databases are used to profile geographic and industry segment demand estimates at postal code, county, metro and state levels. The result is a reliable way to profile the specific demand for MRO products based on the location and concentration of specific types of industries. It is also a reliable method to target specific plants and facilities with estimates of their annual consumption of specific consumable MRO products. Due to slight variations in product groups included, as well as periodic adjustments to U.S. government databases and classification systems, data previously published by MDM on the size of MRO markets are not directly comparable to data in this 2015 report. The MDM Analytics model provides a market size estimate in U.S. dollars, without regard to market channels, at the end-use consumption level. An estimated average distributor margin by product category is included in the calculations. It is not possible to estimate demand or market size in reseller channels, including wholesale and retail. All estimates in this report are in U.S. dollars and represent the end-user market demand that includes an estimated average distributor margin by product category in the calculations. MDM Analytics is the data division of Modern Distribution Management. COPYRIGHT AND TERMS OF USE Copyright 2015 by Modern Distribution Management and MDM Analytics/Gale Media, Inc. All rights reserved. This report is protected by copyright law and may not be copied or otherwise reproduced, repackaged, further transmitted, transferred, disseminated, redistributed or resold, in whole or in part, in any form or manner or by any means whatsoever, by any person without prior written consent from Gale Media, Inc. This report may not be used in commercial documents without the written permission of the copyright holder. You may make one machine readable copy and/or one print copy for your personal use. You may also include limited excerpts of this content in printed memos, reports and presentations for non-commercial use. We ask that you attribute this information by including Source: 2015 MRO Market Analysis: cutting tools and abrasives 2015 Gale Media, Inc. All rights reserved. Gale Media, Inc., 2569 Park Lane, Suite 200, Lafayette, CO Page 2
3 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Executive Summary MDM Analytics estimates the U.S. market size for cutting tools and abrasives, as defined below, at $XX billion, XX percent of a total market typically defined as maintenance, repair, operating and production (MROP) equipment those consumable products used in production, maintenance and repair across manufacturing, construction, mining, energy and facilities maintenance applications across all markets. The total U.S. market size estimate for 114 MROP product groups in 2015 is $XX billion, according to MDM Analytics annual analysis of MRO markets. A full definition of the 114 product groups included in this estimate of a total MRO market size is on pages of this report. MDM Analytics defines the core industrial MROP market size at $XX billion, as defined by the products listed in the Industrial MROP Market products definition on p. 12. MROP Market Profile Total MROP Market $XX Billion See p. 12 for products definition Industrial MROP Market $XX Billion Cutting Tools and Abrasives $XX Billion PRODUCT CATEGORY & DEFINITION MDM Analytics defines the cutting tools and abrasives market size using U.S. Census Bureau Economic Census data as a baseline for domestic supply. The aggregated product categories defined below are built up from a series of discrete product subcategories; these are each defined based on the North American Industry Classification System (NAICS) taxonomy up to the 10-digit level. CUTTING TOOLS (NAICS et al.) Tools Cutting Carbide: Solid carbide tools and inserts and carbide-tipped cutters, bits, other small tools Tools Cutting-High Speed Steel: Carbon/high-speed steel shank, solid, tipped carbide twist drills; other cutting tools for machine tools; end mills and milling cutters; dies taps, carbide indexable, specials; metal working/woodcutting ABRASIVES (NAICS et al.) Abrasives Bonded: Wheels and other bonded abrasive shapes Abrasives Coated: Sandpaper, textile base abrasive products: sheet, belts, discs, etc Abrasives Grain Grit Shot: Loose grain, grit, shot, sand, etc for grinding, polishing, industrial blasting; OEM use of grain in bonded and coated abrasives Abrasives Super: Super abrasives, including diamond, boron, CBN (all bonds) Page 3
4 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES Estimated Overall Market Demand for Cutting Tools: After dropping sharply from 2008 to 2009, estimated market demand for cutting tools rebounded in 2010 and 2011, remained relatively flat in 2012 and 2013, and saw marked improvement in $6.0 $5.0 $4.67 $4.82 $4.92 $4.99 $5.36 Billions $4.0 $3.0 $2.0 $4.02 $3.08 $1.0 $ Estimated Overall Market Demand for Abrasives: Estimated market demand for abrasives also dropped sharply from 2008 to 2009, rebounded in 2010 and 2011, remained relatively flat in 2012 and 2013, and saw marked improvement in $6.0 $5.0 $4.53 $4.31 $4.85 $4.81 $4.80 $5.15 Billions $4.0 $3.0 $2.0 $3.08 $1.0 $ Page 4
5 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Total Demand by Product Category The two major product categories that define the $XX billion U.S. cutting tools and abrasives market are roughly equal in size. The two cutting tools subcategories and four abrasives subcategories are segmented here. U.S. Cutting Tools and Abrasives Market $XX Billion Tools Cutting-High Speed Steel $2,136 Million 39.8% Cutting Tools $5.4 Billion 51% Abrasives Super $773 Million 15.0% Abrasives Grain Grit Shot $1,035 Million 20.1% Abrasives Bonded $1,233 Million 23.9% Tools Cutting Carbide $3,229 Million 60.2% Abrasives $5.2 Billion 49% Abrasives Coated $2,111 Million 41.0% Total Cutting Tools Market $XX Million Total Abrasives Market $XX Million Total Demand by Product Category - Detailed The following table segments the cutting tools and abrasives market by product subcategories. The percentage shown is of the combined cutting tools and abrasives market, which totals $XX billion. Product Total Demand U.S. $ % of Total Demand Tools Cutting-Carbide $XX XX% Tools Cutting-High Speed Steel $XX XX% Abrasives Coated $XX XX% Abrasives Bonded $XX XX% Abrasives Grain Grit Shot $XX XX% Abrasives Super $XX XX% Total Market $XX XX% Page 5
6 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Regional Market Analysis The upper midwest Northeast Central region as defined by the U.S. Census Bureau accounts for more than a quarter of the demand for cutting tools and abrasives, according to MDM Analytics estimates. Estimated market demand across nine regions is segmented here. U.S. Cutting Tools and Abrasives Market $XX Billion Pacific Costal Northwest Central Northeast Central New England Mid-Atlantic Mountain Southwest Central Southeast Central South Atlantic States included in each of the nine U.S. regions, according to the U.S. Census Bureau: NORTHEAST CENTRAL: Illinois, Indiana, Michigan, Ohio, Wisconsin SOUTH ATLANTIC: Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, West Virginia SOUTHWEST CENTRAL: Arkansas, Louisiana, Oklahoma, Texas PACIFIC: Alaska, California, Hawaii, Oregon, Washington MID-ATLANTIC: New Jersey, New York, Pennsylvania NORTHWEST CENTRAL: Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota SOUTHEAST CENTRAL: Alabama, Kentucky, Mississippi, Tennessee MOUNTAIN: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming NEW ENGLAND: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont * MDM Analytics profiles demand for 100+ MROP products at a ZIP code level. See page 12 for more information. Page 6
7 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Market Demand by U.S. State The top XX states account for XX percent of the total $XX billion market for cutting tools and abrasives in the U.S., according to MDM Analytics estimates. This table segments demand for each of 50 states. State Est. Demand ($ millions) State Est. Demand ($ millions) Page 7
8 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES Demand by End-Market Sector (2-digit NAICS) MDM Analytics segments estimated demand for industrial products by category and end-market sectors based on the North American Industry Classification System (NAICS) taxonomy. The system defines the structure of the economy by sector (2-digit NAICS code), subsector (3-digit), industry groups (4-digit) and industry (6-digit). The chart below profiles the three largest demand sectors for cutting tools and abrasives manufacturing (NAICS 31-33), construction (NAICS 23) and other MRO end markets, as defined on p. 11. The manufacturing sector (NAICS 31-33) contains 364 industries, defined at a 6-digit NAICS code level. See the next page for a demand profile of the top 20 manufacturing industries. The construction sector (NAICS 23) contains 31 industries, defined at a 6-digit NAICS code level. See page 10 for top 20 construction end markets profile. U.S. Total Cutting Tools and Abrasives Market $XX Billion Manufacturing Sector (NAICS 31-33**) Construction Sector (NAICS 23**) Other MROP End Markets* * see page 11 for a list of all end markets included under the Other MROP category ** see page 2, Report Methodology, for a fuller definition of NAICS codes and industry classifications Page 8
9 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Demand: Top 20 Manufacturing End-Market Industries (6-digit NAICS) This table segments estimated annual demand for cutting tools and abrasives by the 20 largest consuming manufacturing industries in the U.S. The top XX manufacturing industries account for than a XX of the total demand for these products across all U.S. consuming end markets. NAICS End Market Est. Demand ($ millions) Page 9
10 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES Demand: Top 20 Construction End-Market Industries (6-digit NAICS) This table segments estimated annual demand for cutting tools and abrasives by the 20 largest consuming construction industries in the U.S. Within the construction sector, demand is concentrated heavily into the XX end market. NAICS End Market Est. Demand ($ millions) Page 10
11 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Demand: Top 10 Other End-Market Industries (6-digit NAICS) The top 10 industries beyond manufacturing and construction sectors that are major consumers of cutting tools and abrasives are profiled in the chart below with estimated annual demand. For the purpose of this report, MDM Analytics defines the Other End-Market Sector as all industries other than those defined in the manufacturing sector (NAICS 31-33) and construction sector (NAICS 23). See list below. NAICS End Market Est. Demand ($ millions) Definition of Other End-Market Industries Health Care and Social Assistance Mining, Quarrying and Oil and Gas Extraction Utilities Transportation and Warehousing Retail Trade Professional, Scientific and Technical Services Wholesale Trade Other Services Administrative and Support and Waste Management and Remediation Services Public Administration Agriculture, Forestry, Fishing and Hunting Information Educational Services Accommodation and Food Services Real Estate and Rental and Leasing Arts, Entertainment and Recreation Finance and Insurance Management of Companies Page 11
12 U.S. Market 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES MRO Product Profile MDM Analytics MRO Product Definition How big is the market for MRO products? The answer depends on what is included in the market basket. MDM Analytics MRO market basket is made up of the following 114 MRO products. Construction/Facility - $XX Billion Contractor Supplies HVACR HVACR Maintenance/MRO Refrigeration Comml/Ind Maint Janitorial Supplies Plumbing Products Plumbing Maintenance/MRO Industrial Market - $XX Billion Abrasives Abrasives Grain-Grit-Shot Abrasives Coated Abrasives Super Abrasives Bonded Brushes Brushes General Maintenance Brushes Industrial Brushes Painting/Prep Chemicals Adhesives MRO Packaging-Adhesives Paint Maintenance MRO Paint Spray Equipment MRO Petro Refined Lubricants Petro Hydraulic Oils Petro Industrial Oil & Grease Petro Metal Cutting Petro Metal Forming Petro Surface Coatings Sealants MRO Controls Controls Process Instruments MRO Cutting Tools Tools Cutting-Carbide Tools Cutting-High Speed Steel Fasteners Fasteners Non-Threaded MRO Fasteners Threaded MRO Fluid Power Hydraulic Pumps-Motors MRO Hydraulic Cylinders MRO Hydraulic Valves-Filters-Misc MRO Pneumatic Cylinders MRO Pneumatic Valves-FRLs MRO Pumps Industrial MRO Hand Tools Tools Files Tools General Hand Tools Hand-Precision Measurement Industrial Pipes, Valves, Fittings PVF Metal MRO Machine Tool Accessories Material Handling Conveyors-Conveying Equipment Casters Industrial MRO Shelving Racks-Lockers-Benches Wire Rope and Slings Power Tools Compressors Industrial All Tools Power-Air Tools Power-Electric Power Transmission Bearings Ball MRO Bearings Mounted MRO Bearings Roller MRO Chain Link MRO Chain Roller MRO Clutches & Brakes MRO Controls Gen-Indst Eqpt MRO Controls Gen-Indst PLCs MRO Controls Specialty Indst MRO Controls Motor & Drive MRO Controls Variable Speed Drives MRO Couplings Flexible MRO Gauges Industrial Instrument MRO Gear Drives & Speed Reducers MRO Linear Accessories MRO Page 12
13 Power Transmission Cont. Linear Actuators & Positioners MRO Motors Fractional HP MRO Motors Integral HP MRO Sprockets MRO Rubber Products Belting Conveyor Flat MRO Gaskets & Packings MRO Hose Hydraulic MRO Hose Industrial MRO O-Rings MRO Pneumatic Tube & Ftgs Seals Mechanical-Automotive MRO Seals Mechanical-Industrial MRO Sheaves MRO Belts Transmission MRO Safety Safety PPE Safety Test-Eqpt and Respirators Saws Saw Blades Welding Equipment & Gases Gases Industrial Non-Welding Gases Industrial Welding Welding Eqp Cstn&Maint MRO Electrical - $XX Billion Circuit Protection Devices MRO Generator Set-Power Supply MRO Light Bulbs MRO Light Bulbs Transprtn MRO Light-Fxtr Transprtn MRO Light Fixtures MRO Switchgear Equipment MRO Test Instruments Prtbl/Bench Transformers Power MRO Wire DataComm MRO Wire & Cable MRO Wire Small Diameter MRO Wiring Devices Current MRO Wiring Devices Non-Current MRO 2015 MRO MARKET PROFILE: CUTTING TOOLS AND ABRASIVES U.S. Market Other MRO - $XX Billion Computer/Telecom Computers Business MRO Computers Processing MRO DataComm Equipment MRO Electronics Components Modules MRO Tools Assembly-Electrical/Electronic Packaging Packaging-Bags Industrial Packaging-Bottles Cans&Drums All Packaging-Containers Plastic Packaging-Containers Paper Packaging-Containers Paper Specialty Tape Plastics Plastic Flex-Film&Sht MRO Packaging-Plastic Film&Sht Plastic Flex-Tube MRO PVF Plastic Maintenance/MRO Plastic Rigid-Sht&Plate MRO Plastic Rigid-Sht&Plate Pkg Plastic Shapes-Tube_Rod_Bar MRO Plastic Shapes-Tube_Rod_Bar Pkg ABOUT MDM ANALYTICS MDM Analytics is the leading market analytics firm for industrial and construction products in North America. Since 1987, MDM Analytics has helped clients reach their full market potential with data services, dashboards and sales force management tools to target high-potential customers and markets. MDM Analytics offers data on more than 200 MRO/OEM product profiles. For a full list, visit MDM Analytics is an essential resource for clients seeking to: identify market penetration & untapped potential; target the highest potential geographic regions, customer segments & product categories; assess individual customer & prospect potential; more effectively deploy resources; and improve sales growth, margins and return on capital. www. Page 13
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