Global demand for Machine Tools reaches $181 Billion

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The World demand for Machine Tools is set to grow 5.5 percent per year through 2019 reaching $181 billion. Gains at the global level will be largely driven by market growth in China and other developing nations, where demand for durable goods is expected to post the strongest increases. This will result in additional investment in new manufacturing capacity and related machine tools in the Asia/Pacific region, the Africa/Mideast region, Eastern Europe, and Central and South America. China alone is expected to account for more than two-fifths of all new product demand through 2019. These and other trends are presented in World Machine Tools, a new study from The Freedonia Group, a Cleveland-based industry research firm.

Through 2019, machine tool demand in Western Europe, the second largest regional market worldwide, is expected to grow nearly six percent per annum. Growth will be in line with the average worldwide pace, and Western Europe will account for 18 percent of product demand gains through 2019. Market conditions in numerous regional countries are expected to improve as both overall economic growth and gross fixed investment accelerate. Analyst Gleb Mytko notes, “Growth will also be supported by the introduction of more expensive machine tools.” In order to develop the next generation of durable goods, manufacturers in the region will invest in machine tools that offer increased control and precision. In Japan, the world’s fourth largest national market behind China, the US, and Germany, demand for machine tools is expected to rebound after several years of losses. Because many Japanese durable goods firms delayed making machine tool purchases in recent years, there is significant pent-up demand in the country.

North America is projected to see machine tool demand decline nearly one percent per year through 2019, due solely to weakness in the large US market. In contrast, Mexico will continue to experience rapid advances in machine tool sales, while the Canadian market is expected to grow at about the world average pace. Many durable goods companies in North America modernized existing facilities, built new plants, and purchased additional machine tools in recent years. As a result, there will be less new and replacement product demand in the region during the 2014-2019 period.