After growing in 2010 and 2011, world machine tool consumption has contracted for two consecutive years. The rate of contraction in world consumption was slightly faster in 2013 (-7.8%) than it was in 2012 (-6.1%). However, based on several leading indicators, world consumption in 2014 should reach approximately $58,300 million, an increase of 6.2%.
World machine tool production also has fallen the last two years. In 2012, world production fell by 1.8%. The contraction in production was significantly slower than the contraction in consumption in 2012. It is very unusual for the rates of change in production and consumption to be substantially different from each other. But, the significantly slower contraction in production resulted in over production of machine tools in 2012, which caused machine tool prices to fall rather significantly in 2013.
In 2013, production contracted 8.5%. Because production fell at a slightly faster but similar rate than consumption last year, supply and demand in the machine tool industry came into a better balance. Therefore, by the end of 2013, machine tool prices were improving from what they were year one year ago, at least in the U.S.
These figures for world consumption, as well as production, are the total for the top 25 consuming countries in any given year. The top 25 countries account for approximately 95% of the world’s consumption and production. Because the survey collects statistics for a different number of countries each year, analysis of the top 25 consuming or producing countries provides a stable base for historical comparison. However, the detailed historical tables show all reporting countries.
In 2013, the top five consuming countries remained the same; however, the order of the top five did change. Despite contracting the last two years, China remains the world’s largest machine tool market. The U.S. remains the second largest market. Having grown two of the last three years, it has narrowed the gap with China. China eclipsed the U.S. as the number one consumer in 2009. The U.S. lost more to ground to China in 2010, and the U.S. market ended 2010 just 45.9% the size of the Chinese market. Since 2010 though, the U.S. has gained ground on China every year. In 2014, because the U.S. should grow by 15% while China remains relatively flat, I estimate that the size of the U.S. market will be 81.4% of the Chinese market.
Germany’s consumption grew 8.4% in 2013, making it the third largest consumer of machine tools in the world. Even though its consumption was relatively flat in 2013, South Korea also moved up one spot in this year’s survey. Japan fell from the third to the fifth largest machine tool consumer in 2013. In 2011, Japan was the second largest machine tool consumer in the world. Since then, Japan’s consumption has fallen by almost 45% in real U.S. dollars.
While the top five producers are the same this year as last year, only China holds the same position in the rankings. Germany is once again the world’s largest machine tool producer, which is the country’s first time holding this spot since 2009. Production in Germany increased about 5% in 2013 from 2012.
Japan fell from its number one position, which it had held for the last three years. Production in Japan peaked in 2011 at $18,484 million. In 2013, production in Japan fell all the way to $12,326 million, a decline of roughly 33%.
China remained the third largest producer in the world. Its production has contracted at a moderate rate each of the last two years.
Last year, Italy held down the number five spot. But, in 2013, Italy was the fourth largest producer in the world. Production in Italy has been relatively unchanged the last three years.
South Korea fell one spot to number five this year. Like Italy, South Korea’s production has been relatively stable the last three years. For the first time in the country’s history, it has produced more than $5,000 million of machine tools for three consecutive years.
Machine tools like lathes and presses are the basic building blocks of manufacturing. They are used in durable goods industries to make items ranging from aircraft to appliances as well as other, more specialized, equipment and machinery. In the World Machine Tool Output & Consumption Survey, data on production, imports, and exports are collected from countries that have substantial durable goods manufacturing industries. Also studied is each country’s apparent consumption, which is calculated as domestic production plus imports and minus exports. Statistics from China are adjusted to account for the large portion of its market that is non-CNC machine tools. However, the figures as reported are included in the detailed tables.
The statistics are cited in the 2014 World Machine Tool Output & Consumption Survey, the annual study released this week by business-to-business manufacturing media company Gardner Business Media, Inc. It is presented in a special report on the Internet and will appear in several upcoming Gardner publications.
Editors of the annual survey, which began in 1965, assemble figures from trade associations, government agencies, or major producers in the more than 25 countries that account for an estimated 95% of the total world shipments. The survey, including supplemental tables on ranking by imports, exports, trade balance, and per-capita consumption, plus remarks on individual participating countries, is available in the Research section of the publisher’s Web site, www.gardnerweb.com. Also, details on leading indicators and forecasts for the top 25 consuming countries can be found at www.gardnerweb.com/forecast/international.htm.
Machine Tool Consumption, real $-millions
2013 (est.) 2012 (rev.)
1. China $11,364.5 $12,950.6
2. United States 8,039.8 8,835.4
3. Germany 7,065.0 6,515.4
4. South Korea 4,476.0 4,464.0
5. Japan 4,196.5 5,914.8
6. Mexico 2,078.3 2,072.3
7. Italy 2,172.0 2,762.9
8. Russia 1,711.9 1,934.8
9. Brazil 1,674.0 1,883.2
10. Taiwan 1,629.0 1,840.7
Source: Gardner Business Media, Inc.
Apparent Consumption = Domestic Production, Plus Imports, Less Exports
Machine Tool Shipments, real $-millions
2013 (est.) 2012 (rev.)
1. Germany $14,687.7 $13,824.9
2. Japan 12,326.4 18,231.3
3. China 8,743.0 9,236.7
4. Italy 5,710.4 5,606.1
5. South Korea 5,306.0 5,485.0
6. United States 4,956.1 4,983.2
7. Taiwan 4,537.0 5,414.0
8. Switzerland 3,129.1 3,282.2
9. Spain 1,218.6 1,095.1
10. Austria 1,094.3 1,000.1
Source: Gardner Business Media, Inc.