2003 World Machine Tool Output & Consumption Survey

Production

Ever since 1991 when its West and East sections were combined, Germany has run neck-and-neck with Japan as the world’s top producer of machine tools. In 2002 the European economic powerhouse took advantage of a dip in Japanese production and ran 15% ahead. But in estimates for the year just ended, a rebounding Japan again took over the lead position with output of $7.86-billion to Germany’s $7.53-billion.

As the Machine-Tool Production table shows, Japan had a yen-based gain of 20%, while Germany had a euro-based decline of 10%.

Currency fluctuations, as usual, affect the comparisons. In the current survey, the U.S. dollar’s ongoing slide causes more skewing than usual. That Japanese production gain of 20% becomes an increase of 29% when converted into dollars. And in the case of Germany, whose euro appreciated even more against the dollar than did the yen, the 10% dec lin e in production actually turned into an increase of 8%. Similarly, for euro-based Italy, once again third in annual machine-tool output, a 2002-2003 dec lin e when measured in local currency turns into an increase when converted to dollars.



Together, Japan and Germany account for 42% of the output of all the countries in the survey, up from 40% the year before.



China again is the fourth leading producer, posting for 2003 an impressive 24% gain in output from revised 2002 levels. (The reporting Chinese builders’ association recently was able to refine its data collection to better exclude the non-machine-tool output of its machine-tool builders. So the revised production total for 2002 is fully one-quarter below the estimate for 2002 originally made a year ago. And the estimate for 2003 is based on the new model.)



The good news for builders in the fifth-place U.S. is that the slide in production appears to have leveled off. To be sure, estimated output for 2003 is still 4% below that of 2002, but that’s considerably better than the 19% slide between 2001 and 2002. With the U.S. domestic market showing signs of renewed order activity and with the start of an aggressive export campaign, the Americans are poised for a strong comeback by the end of 2004.

The main news about 2003 world machine-tool production is that Asia’s largest

producers all posted double-digit increases.

As a region, Asian (including Australian) builders accounted for 41% of the survey’s total world output for the year just ended, compared to 37% a year ago. In contrast, share generated by the Western European bloc belonging to the Brussels-based CECIMO union slipped to 48% of world production, from 50% in 2002.

Trade and Consumption

Export and import activity apparently increased in 2003. Of the top ten leaders in machine-tool production, all except the U.S. and Switzerland made gains in exports when measured in U.S. dollars. The shrinking value of the dollar plays a large part in that.

China once again dominates the list of importers. Her $4-billion in imports account for over 11% of world production.

The size of a particular national market can be measured by the “apparent consumption” seen in the Consumers table. Apparent consumption is calculated as a country’s domestic production, less its exports, and plus its imports.

It’s a more stable measure of a market than other indicators like orders , such as compiled by the U.S. Machine Tool Consumption series of reports from AMT and AMTDA. That’s because the time lag between placement of an order and actual shipment from the factory or warehouse can vary widely, depending on market conditions, inventory levels, the type of machine (some are built more quickly than others), and even the time of year (as in summer shutdowns). In contrast the formulaic consumption reported in this survey measures machines that are actually delivered.



Ranked by consumption in dollars, China remains the world’s biggest market for machine tools, with $6.58-billion purchased and delivered.



An interesting variation on the consumption measure is consumption weighted for population (per-capita table). It’s a way of envisioning a country’s relative rate of industrialization. Switzerland continues to be the most machine-tool-oriented nation; on average its machine-tool spending comes to $74 for every person in the country. The U.S. spends $14 and stays in the same slot (#17) in relative ranking as it has for the previous two years.

[ Return to MMS Online Reports | Metalworking Insiders' Report ]