Analysis of the development of machine tool industry in the world in 2014
"EFFICIENT MANUFACTURING" magazine conducted interviews with presidents of machine tool associations across the globe, covering regional macroeconomic trends, industry development, market prospects, and technological advancements. The insights highlight the current state and future outlook for the global machine tool sector.
**India: Recovery Begins to Take Shape**
India's economic growth has faced challenges due to a combination of external factors, domestic monetary tightening, weak consumer confidence, and ongoing reforms. However, signs of recovery are emerging. According to the Oxford Economic Report, major machine tool user industries in India are expected to grow by 5.2% in 2014 after two years of decline, which could drive a 3.8% increase in machine tool consumption. Despite this, monetary policy tightness and government reforms may still impact market growth. The Indian Machine Tool Association remains optimistic, citing the 2014 automobile tax reduction as a key driver. With the tax rate lowered from 12% to 10%, the automotive sector is expected to boost demand, potentially increasing machine tool consumption by 5-10%. In 2015, the market is projected to grow by 15% year-on-year.
Indian machine tool consumption remains stable at around $2.05 billion, with one-third sourced domestically. Recent projects in automotive, aerospace, defense, and energy sectors have led to increased orders. A notable trend is the growing demand for forming machine tools.
**China: Weak Demand Continues**
China’s economy is undergoing a structural shift, with reduced investment leading to slower growth. The Oxford Economic Report forecasts 7.2% growth in 2014 and 7.1% in 2015. This slowdown has resulted in weaker demand from machinery, commercial vehicles, and metal products industries. Low capacity utilization further limits new equipment purchases and expansion plans, affecting long-term machine tool consumption.
According to the China Machine Tool Industry Association, the market remains sluggish, especially in the gold cutting segment, where imported machine tools have seen sharp declines. Demand for low-end products has also dropped, while exports show only minor fluctuations. In 2013, China’s metal processing machine tool consumption fell by 16.6% year-on-year to $31.91 billion. While most segments declined, specialized, automated, and high-value-added products showed growth, a trend that is expected to continue.
**EU: Growth Gains Momentum**
The EU’s GDP turned positive in Q2 2013, signaling the end of its longest economic crisis. Consumer confidence has reached levels not seen since 2008, and unemployment rates have started to decline in some countries. Both consumption and investment have grown, reducing the region’s reliance on external markets. Industrial production has increased moderately, and capacity utilization has approached historical averages.
EU machine tool exports accounted for 83% of output value, though they were affected by weakness in emerging markets like China and India. In 2013, EU machine tool shipments reached 18.3 billion euros, second only to 2007. Although consumption decreased by 4% in 2013, it began to recover in 2014, with order volumes up by 8% and 16% year-on-year. The European Machine Tool Association is cautiously optimistic about a 4.6% annual growth in 2014, outpacing China and Taiwan.
**Germany: Economic Growth Remains Unstable**
In 2014, Germany’s steel, electrical, mechanical, rail, and aviation sectors are expected to boost demand for machine tools. While overseas orders in 2013 from Turkey, the UK, and Russia were modest, Asia and the Americas will be key drivers in 2014. Domestic and international orders are forecasted to rise by 10%, with machine tool output reaching €14.8 billion—its highest ever.
The German Machine Tool Association anticipates trends in personalization, automation, and efficiency. Customized solutions are becoming more common, with users seeking only critical machines rather than full production lines. Energy efficiency will also remain a priority, with the use of variable frequency motors and low-power hydraulic valves.
**Italy: Steady Increase in Demand**
Italian machine tool output was 4.78 billion euros in 2013, down 1% year-on-year, with three-quarters exported. China, the U.S., Germany, Russia, and France are top export destinations. Imports rose slightly, and consumption hit a low point, down 1.6% from 2012. The Italian Robotics and Automation Industry Association notes that despite challenges in the automotive sector, other fields such as biomedicine, nanotechnology, and energy offer new opportunities. With 5% of output invested in R&D, Italian manufacturers focus on providing tailored solutions.
**Spain: Orders Gain Momentum**
Spain’s economic downturn has slowed, with GDP expected to grow by 0.5% in 2014. The manufacturing sector, particularly in automotive parts, energy, aerospace, and railways, is driving growth. These sectors are projected to grow by 4.2%, far exceeding the average Spanish industrial growth rate, leading to rapid increases in machine tool orders.
**Japan: Government Support Boosts Industry**
Japan’s GDP grew by 1.7% in 2013 and is expected to maintain similar growth in 2014. Government policies, including currency depreciation and tax reforms, are stimulating manufacturing. In 2013, Japanese machine tool orders fell by 7.9%, but domestic orders rose by 6.6%. The government’s stimulus policies are expected to boost orders by 16.3% in 2014, with Asia remaining the largest market.
**US: Manufacturing Drives Growth**
Despite not matching Asian growth rates, the US has maintained steady 3-4% growth for four years. The “return to manufacturing†strategy has played a key role in economic recovery. The US is set to become a major global energy supplier, with low energy costs and a strong transportation network boosting local manufacturing competitiveness.
**UK: Looking Forward to Recovery**
The UK economy is recovering, driven by a shift from real estate to exports and commercial investment. GDP is expected to grow by 2.2% in 2014, with machine tool consumption rising by 4%. The aerospace, automotive, and energy sectors are key drivers of technological advancement in the machine tool industry.
**South Korea: Investment Grows Steadily**
South Korea’s manufacturing sector showed signs of recovery in 2013, with increased machine tool purchases in automotive and general machinery. The Oxford Economic Report expects steady growth in 2014, driven by strong investment in advanced economies. The South Korean machine tool association reported higher overseas orders and increased CNC machine tool demand, while ordinary machine tool orders declined.
**Taiwan: Accelerating Growth in 2014**
Despite a slow economy, Taiwan is expected to rebound in 2014, supported by global economic growth, especially in the US. While dependent on mainland China, the machine tool user industry is projected to grow by 5.4% in 2014, with an overall economic growth rate of 3.1%.
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