CAM Market Experiences Solid Growth In 2004

The worldwide CAM software and related services market turned around after having declined or having been flat for 4 consecutive years (it experienced solid growth in 2004). The market, as measured by end-user payments, is estimated by CIMdata to have grown 7.2 percent from $1.11 billion in 2003 to $1.19 billion in 2004. This follows declines of 1.6 percent in 2000, 7.5 percent in 2001 and 0.4 percent in 2002, with a small growth of 0.5 percent in 2003. Purchases reached a peak in 1999 at $1.22 billion prior to the period of decline.

CIMdata projects that 2005 will also be a strong year, and that end-user payments for NC software and related services will increase by 7.4 percent to reach a level of $1.28 billion. If so, this would set a new high for the CAM software market. This information and other statistics are contained in the upcoming annual “NC Software and Related Services Market Assessment Report.” The report consists of more than 200 pages, and it can be obtained from CIMdata. The annual end-user payments for CAM software for 1996 through a projected 2005 are shown in the chart below.

The global CAM market is dependent on the global economy; the strength of the manufacturing sector; the extent of technology spending by companies; and the value, number and type of machine tools purchased. All four factors were generally positive in 2004. Most areas of the world, particularly in Asia and North America, experienced strong economies and growing manufacturing sectors. The Federal Reserve reported that the industrial production index grew by more than 4 percent in the United States in 2004, and some Asian countries saw industrial production grow by double that amount. Most of Europe was sluggish, but it still experienced growth in GDP and manufacturing.

Worldwide PLM spending grew nearly 10 percent in 2004, which is directly related to technology spending. Additionally, machine tool consumption in the United States in 2004 was up by more than 30 percent compared to 2003. This is particularly positive after several years of decline. All of these indicators boded well for purchases and use of NC software.

CIMdata is cautiously optimistic with regard to CAM software purchases in 2005. It can be inferred from the chart at right that the company is forecasting another good year in CAM software, with a growth rate of 7.4 percent, essentially the same increase that was achieved in 2004. A number of NC software suppliers have indicated to CIMdata that they experienced particularly strong sales in the first quarter of 2005, so these firms are off to a good start.

Many articles have dealt with the subject of shops remaining competitive in a difficult and highly competitive global manufacturing environment. Among other things, this requires a high capital-to-labor ratio and full use of current and advanced numerically controlled machine tools and appropriate software. As one example, CIMdata recently visited a mold shop in Germany in which 40 percent of the CNC machines were simultaneous five-axis machine tools. One machinist is routinely able to operate three machine tools, and the company operates three shifts. This family-owned shop focuses on large and complex molds that others might find difficult to build. As a result, it is able to meet the international competition and steadily grow its business. It is firms like this that are currently fueling the growth in both machine tool consumption and CAM software purchases.