U.S. Machine Tool Market Peaked at $9.7B

Metal-Forming Machinery And Machine Tools September 22, 2017
Author: Irina Andreeva
Market Analyst

machine tool market

Photo: © Wichan sumalee / Bigstockphoto

According to market research conducted by IndexBox, the machine tool market in the U.S. increased by 5% in 2016 to 9,715 million USD. Previously, an abrupt drop was recorded in 2008, which was then followed by a recovery through to 2012. Afterwards, the market value leveled off, fluctuating mildly from 2013-2016.

The growth in demand for machine tools from the processing industries, which is expected to continue against the background of the general economic and investment activity growth of the United States, the increase in the number of new enterprises, and the modernization of old equipment in existing enterprises, will contribute not only to the growth of the market, but also to the growth of domestic production. Therefore, the U.S. growth in machine tool consumption is expected to accelerate slightly to +2.6% per year from 2016 to 2025 (currently +2.3% per year from 2008-2016).

Metal machining centers (multifunction numerically controlled machines) accounted for the highest share (18% in 2016) of U.S machine tool manufacturing, followed by rebuilt metal-cutting machine tools, remanufactured metal-cutting machine tools, and parts for metal-cutting-type machine tools (8.7%), metal punching and shearing machines (including power and manual) and bending and forming machines (power only) (8.1%), metal grinding, polishing, buffing, honing, and lapping machines, excluding gear-tooth grinding, lapping, polishing, and buffing machines (7.9%), metal gear cutting machines (7.9%) and metal lathes (turning machines) numerically and nonnumerically controlled (6.7%). The other categories occupy about 43% in the aggregate.

The most notable growth rates in U.S machine tool manufacturing from 2008 to 2016 were attained by rebuilt metal-cutting machine tools, remanufactured metal-cutting machine tools, and parts for metal-cutting-type machine tools (+5.1% per year), while the other leading categories experienced more modest paces of growth.

The U.S. exported 3.4 billion USD of machine tool in 2016, which accounted for 46% of U.S. machine tool output. There was a mixed trend of exports value: after the decline in 2009, it recovered over the next two years and downturned from 2013 to 2016. This, however, enabled the U.S. to take the fourth spot in global machine tool exports (with an 8% share, based on USD), following Japan (19%), Germany (18%) and Italy (8%).

In 2016, the main destinations of U.S. machine tool exports were Mexico (26%), Canada (17%) and China (12%). China had the highest annual average growth rate of imports from the U.S. (+5.1%) among the leaders from 2007 to 2016. The share exported to Mexico (+11 percentage points) and China (+4 percentage points) increased, while the share sent to Canada illustrated negative dynamics (-5 percentage points). The shares of the other countries remained relatively stable throughout the analyzed period.

Despite fierce competition, the U.S. continues to be one of the most attractive destinations for overseas suppliers, taking the second spot in global machine tool imports (with a 13% share, based on USD), following China (18%).

The value of total U.S. machine tool imports totaled 5.7 billion USD in 2016, with a declining trend over the last four years. Intense competition from imports, particularly from Japan and Germany, has significantly constrained industry performance during this period. From 2008 to 2016, the import share in total consumption decreased from 73% to 58% due to rise of the value of the domestic production. As a result, the domestic manufacturers strengthened their market position in 2016, but imports still comprised a major market share.

In 2016, Japanese (19% of the market, in value terms) and German (10%) machine tool held an important share in total U.S. consumption. The share of Japanese machine tool decreased by 11 percentage points, the share of products from the Republic of Korea decreased by 2 percentage points, suppliers from Germany, Canada and Switzerland reduced their presence in the U.S. market by 1 percentage point each.

Among the importing product categories, the largest shares of imports in the U.S. consumption were held by machining centres for working metal (11% in 2016, based on USD), machine tools, for working metal by forging, hammering etc; machine tools, for working metal by bending, folding, etc; presses for working metaland (10%), lathes, incl. turning centres, for removing metal (9%) and parts and accessories for machine tools for working metal by removing material (8%).

In the medium term, competition with imported machine tools is expected to remain stiff. Besides the strongest competitors from Japan, which traitionally boast high-quality products, some other competitors are to widen their penetration into the US machine tool market. These will be, on the one hand, manufacturers from developing Asian countries, which win clients thanks to their favourable prices, on the other hand, European producers supplying more expensive products but possessing new technological capabilities (for example, increased standards of control and accuracy of processes).

The barriers to entry on the U.S. machine tool market are moderate. The highly fragmented nature of this industry means that product quality and reputation are key to success. The common trend is that metalworking enterprises are concentrated around industrial centers and manufacturers, which encourages a high level of competition at local markets. This trend is spreading both to American and foreign companies. In some areas of this industry, technical knowledge is another common barrier to entry. In this highly competitive U.S. machine tool market, companies with access to the latest and most efficient technologies and those who have business contacts in key consuming markets should secure a sustainable market position.

Do you want to know more about the U.S. machine tool market? Get the latest trends and insight from our report. It includes a wide range of statistics on

  • machine tool market share
  • machine tool prices
  • machine tool industry
  • machine tool sales
  • machine tool market forecast
  • machine tool price forecast
  • key machine tool producers

Source: U.S. Machine Tool Market. Analysis And Forecast