CAM Market Does Turnaround In 2003

CIMdata estimates that in 2003, the worldwide CAM software and related services market turned around after declining for 3 straight years. The market, as measured by end-user payments for NC software and services, is estimated to have grown 1.1 percent from $1.039 billion in 2002 to $1.050 billion in 2003. This follows declines of 1.6 percent in 2000, 7.5 percent in 2001 and 6.4 percent in 2002. Purchases peaked in 1999 at $1.22 billion before the 3-year decline began. The turnaround in 2003 stems the decline.

CIMdata projects that 2004 will be an improved year and that end-user payments for NC software and related services will increase by 6.9 percent to $1.122 billion. This information is from the market statistics in the recent NC Software and Related Services Market Assessment Report, Version 13. This annual 200-plus page document is available from CIMdata.

The worldwide CAM software market is dependent on the global economy, the manufacturing sector, technology spending and machine tool purchases. All four began to bounce back in 2003 after depressed conditions in prior years. International trade in goods rose by 4.5 percent worldwide in 2003, and the World Trade Organization says it could grow by 7.5 percent in 2004 as the world economy recovers. The European manufacturing economy is expected to remain sluggish in 2004, but strong increases are expected in Asia Pacific countries, such as China, and the rebound in U.S. manufacturing is expected to continue.

Western Europe is experiencing a recovery, but it continues to lag behind the United States and Japan; a growth of only 2 percent is projected for 2004. From late 2002 through mid 2003, industrial European nations experienced almost no growth, with economic activity in France, Germany and Italy actually showing small declines.

The Chinese economy recorded 9 percent growth in 2003, and 8.5 percent growth is projected for 2004. In 2003, Japan came out of its doldrums. In the fourth quarter, its GDP grew at an annual rate of 7 percent, its fastest rate since 1990. India, South Korea, Taiwan, Indonesia, Hong Kong and Australia are also expected to do well.

The United States, which accounts for 22 percent of the global GDP, will continue to drive the world economy. The U.S. economy has recovered significantly, with a 6 percent annual growth in the second half of 2003, up from 2.5 percent in the first half of the year. A 4.5 percent growth rate forecast is common for the United States in 2004. Manufacturing productivity is also increasing. For example, in the third quarter of 2003, U.S. manufacturing productivity grew by 8.6 percent.

CIMdata and most worldwide NC software suppliers are cautiously optimistic and anticipate an increase in end-user purchases of CAM software during the rest of 2004. If this occurs, the inherent forces that have driven the growth in NC software purchases in the past could come into play, and the CAM software market will continue its modest growth of about 5 percent per year.