Editor's CommentaryFind the complete survey results here.
The economic downturn is clobbering bookings for new factory equipment, including machine tools. Here in the United States, orders tracked by the two principal manufacturing technology trade associations for the last month of 2008 were half of what they were a year prior. It was worse elsewhere. In Japan, for example, orders for new metalcutting machines in December were off 72 percent from 2007 levels, and like the United States, the steepest monthly declines started after September. As orders diminish, installations will follow.
However, despite precipitous drops during the latter months, 2008 as a whole was a growth year for the world’s machinery users. Consumption among the major industrial countries expanded at an average of 12.8 percent. China ranks at the top of consuming nations, as it has since 2002. Its consumption is almost $10 billion ahead of second-place Germany. Last year, China’s appetite accounted for almost a quarter of the value of all machine tools produced in our survey.
These figures come from the 44th edition of the World Machine Tool Output & Consumption Survey, conducted annually by Gardner Publications, Inc. The survey samples shipments, trade and consumption from 28 major industrial countries that have substantial machine tool producing sectors.
The majority of surveyed countries showed an increase in consumption for the year. Consumption is calculated by subtracting a country’s exports from its domestic output and adding imports. What’s left is assumed to have been “consumed,” or installed within that nation.
In recent years, China has held the lead in consumption largely by virtue of its imports. While that remains the case—China still is the world’s largest machine tool importer—growing domestic builders are fulfilling an increasing percentage of its requirements. Germany saw a sizeable increase in installations, amounting to 25 percent in euros and even more when converted into U.S. dollars. It moved ahead of Japan, where yen-based consumption dropped 8 percent. In the United States, machine installations grew 14 percent for the year, even taking into account the slackening pace at year-end. Italy rounds out the top five among consuming countries; its position is unchanged from last year’s survey.
On the other side of the coin, production of machine tools, output amounted to $82 billion in 2008, compared to $71.4 billion a year before. Japan remains the world leader with an output of $15.8 billion. However, that represents a slip of 3 percent from the 2007 total, measured in yen. Germany virtually ties Japan with $15.7 billion in output. German producers benefitted from a 13-percent euro-based gain in 2008, showing a momentum that could propel it to the top spot in the next survey. The No. 3 producer is China. Its estimated $14 billion in shipments represents a dollar-based growth rate of 30 percent compared to the previous year. That expansion is a bit slower than the torrid 40 percent (or more) increases seen in recent years, but it’s still the fastest growth among major machine tool producer countries.
Italy, Taiwan, South Korea, the United States and Switzerland are next among top-tier producing countries, each with annual output of $3.5 billion or higher. Among these top producers, Switzerland joins Japan in showing a slight percentage decline in shipments compared to 2007. That’s when the countries are compared in their respective local currencies; when converted to U.S. dollars, all the top tier producers posted percentage increases.
An interesting perspective comes from looking at statistics on various countries’ trade balances in machine tools—that is, exports minus imports measured in dollars. In other words, which countries take in money on their machinery-producing industries? Japan leads the self-sustaining list with a positive balance of $7.8 billion, followed by Germany at $5.7 billion. Next come Italy, Switzerland, and Taiwan, each with a positive trade balance of around $2.3 billion. At the bottom end of the scale, with a negative trade balance of $5.4 billion, is China. Next worst among the 28 surveyed countries, at negative $3 billion, is the United States, where imports account for a whopping 72% of machine tool consumption.
The complete 2009 World Machine Tool Output & Consumption Survey, including numbers on imports and exports as well as per-capita consumption, is available online here.