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Global machine tool business set to gather momentum in 2017
- March 10, 2017
- News Release
- Shop Management
Adversely affected by numerous international crises, the global economy is currently in a relatively cautious phase. This applies to GDP, industrial production output, capital investment in the major user sectors for machine tools, and thus international machine tool consumption.
However, for 2017, economic pundits are anticipating an improved situation in global machine tool business, with investments rising by 1.5 percent and machine tool consumption by 2.1 percent, reports the VDW (German Machine Tool Builders’ Association), Frankfurt am Main, Germany.
Europe is expected to top the rankings again, with an increase of 4.1 percent. The principal drivers continue to be Italy, Spain, and France—three major machine tool markets. Some markets of Eastern Europe, too, are boosting this trend. Asia and the U.S. can achieve only an underproportional rise in their machine tool consumption during 2017, of 1.7 and 0.9 percent, respectively, but will at least be turning a minus into a plus.
The U.S. economy has recorded a continual uptrend for seven years now, driven primarily by private consumption. Investment activity in the nation’s industrial sector, by contrast, is sluggish. Important sectors such as mining and oil and gas production are in a phase of consolidation, according to gtai (Germany Trade & Invest), and capacity utilization is unsatisfactory in many parts of the U.S. industrial sector. Falling corporate profits and weak demand from abroad are causing genuine concern.
The automotive industry, by contrast, is doing well. Sales of cars, SUVs, and other light vehicles are reaching record levels. With the trend towards downsizing, new technologies are being adopted on a broad front in the U.S. automotive industry, like turbocharging, direct fuel injection, and start-stop systems.
Eighty percent of the vehicles sold in the U.S. are manufactured there as well. So leading-edge production technology is in high demand in automotive factories. Nearly all producers have announced major projects for modernizing and upsizing their capacities. According to Oxford Economics, the U.S. automotive industry will be increasing its capital investment by 1.0 percent in 2017. Technologies for reducing fuel consumption and lightweight components are in high demand. The focus is on machining aluminum, combinations of lightweight materials, and carbon. This also applies to aircraft manufacturers, which intend to invest 5.6 percent more this year.
The U.S. imported more than 60 percent of its machine tool consumption in 2015. With a share of 16 percent, German ranks second among the major supplier nations concerned, after Japan. From a German viewpoint, in 2016 the U.S. was the second-most important export market, with a share of almost 12 percent. The amount of machines, parts, and accessories supplied increased 11 percent. Demand was chiefly for parts and accessories, machining centers, bending machines, laser systems, and grinding machines.
“The U.S. manufacturers of production technology … need to intensify their focus on international markets,” said VDW Executive Director Dr. Wilfried Schäfer. Their position on the global market demonstrates how internationally competitive they are. With a volume of almost $5.3 million, and a share of more than 7 percent, they rank among the top 10 of the most important manufacturers worldwide. They export around 43 percent of their production output. According to the VDW’s global statistics, most recently in 2015 exports had increased by one-tenth.
Deliveries to Germany fell by a double-digit percentage in 2016. Germany ranks sixth among the most important markets for U.S. equipment manufacturers. The U.S. ranks eighth among the most important suppliers for Germany’s industrial sector: In 2016, machines worth about $128 million were imported to Germany from the U.S., primarily parts and accessories.
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