Executive Summary:
Modern Machine Shop’s Investments in Shopfloor Technology
Survey

March 2009

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About the Survey:
For much of January and February of this year we had heard anecdotally that, while North American capital spending on metalworking technology has been severely depressed due to current economic conditions, engineering and quoting activity remained high and many manufacturing companies were still relatively busy. This survey, held between February 23 and March 2, was conducted to validate that contention and to measure more specifically how the recession is affecting metalworking manufacturers’ investment plans. The survey questionnaire was posted online and publicized via Modern Machine Shop’s MMS Extra e-mail newsletter and MMS Online website, and generated 183 responses.

Summary:
While the survey certainly confirms broad concern over the recession, it nonetheless paints a more positive picture than some might guess. For example, one third of respondents said their company’s business is stable or growing, and another third said business is only “slightly declining.” Some 20 percent are currently in process of purchasing capital equipment or software or actively researching for later purchase. Another 23 percent are considering future purchases, and more than 14 percent have already purchased this year.

But a strong majority is taking a wait-and-see position before releasing funds. While 28 percent of companies said the recession has not affected their equipment purchasing plans, more than half said they have delayed plans because of it. Only 15.6 percent said they have canceled planed purchases so far. As for why they are delaying plans, over 20 percent said business is still good but they are uncertain about the future. Nearly 50 percent said they are reducing spending because of business declines.  Of those delaying purchases, a quarter said they will follow through as soon as they regain confidence in the general economy, and over half said they will follow through as soon as business improves.

Surprisingly, only 1.6 percent said they are cancelling or delaying purchases due to difficultly in finding financing, which appears at odds with what we have heard from a variety of equipment vendors. The low number may be explained by the fact that many shops delaying purchases have not yet sought financing.

Of those planning to purchase, nearly a quarter expect to purchase in the next three months, a quarter in the next 4-6 months, and over half in the next 7-12 months. Over 56 percent of this group said they would buy new machine tools. Other categories of planned purchases included workholding (42.9%), used machine tools (32.1%), CAD/CAM and related software (24.3%), metrology (23.6%) and shopfloor automation (15.7%).
 
These manufacturers have been very aggressive in their efforts to reduce costs. Interestingly, the number one method they have used is to improve processes, which over 60 percent said they have done, and 16 percent have increased automation. But they have cut a lot too with 54 percent saying they have reduced employee hours, followed by reductions in staff (44.7%), materials inventory (39.1%), cheaper suppliers (29.1%), and tooling inventory (24.6%). Only 5.6 percent said they have done nothing to reduce costs.

The survey also asked shops planning to buy what information sources they use to help research their purchases. The answer was an interesting mix of tried-and-true preferences along with new media options. The number one information source continues to be supplier sales people (68.5%) followed by trade magazines (58.2%), supplier web sites (51.4%), industry web sites (50%), trade shows and seminars (49.3%), search engines (36.3%), e-mail newsletters (11%) and online “webinars” (8.2%).

About the Sample: