After the recovering growth in 2010 and 2011, global machine tool consumption recorded -6.1% and -8.5% growth in 2012 and 2013 respectively. Based on some indicators, however, global machine tool consumption is expected to increase by 6.2% to USD 58.3 billion in 2014. This article summarizes and analyzes the machine tool consumption or production status in 27 economies which account for 95% of the world’s machine tool consumption and output value.

Gardner Business Media released their 49th edition of Annual Survey Report on Global Machine Tool Consumption and Production, which converted nominal USD price into actual USD price via Capital Equipment Manufacturer Price Index to facilitate historical comparison; since non-CNC machine tools are key production and consumption products, China’s machine tool consumption and production data is reduced.

Overcapacity in 2012 incurred results in dramatic drop in price in 2013 when the decline rate for global machine tool output value hit 9.8%, higher than that for consumption. This indicates a fundamental balance global machine tool supply and demand.

Global machine tool consumption status

In 2013, the top 5 machine tool consumers in the world remain unchanged, China remains the largest machine tool market and next comes the USA. In 2009, China surpassed the USA to become the largest consumer. In 2010, the gap between the two countries became larger, while the growth rate in the USA surpassed that in China. In 2014, the USA is expected to maintain 15% growth rate.

Germany promoted her ranking from the fourth to the third. In 2013, Germany maintained 8.4% growth rate in machine tool consumption and is expected to maintain her ranking in 2014 as the third largest machine tool consumer in the world.

South Korea promoted her ranking from the fifth to the fourth in the year and is expected to maintain 13% growth rate in machine tool consumption in 2014. While Japan’s ranking dropped from the third to the fifth. In 2014, Japan is expected to maintain 6% growth rate in machine tool consumption, probably representing an average level in the world.

Mexico experienced the largest upward promotion in ranking, from 1.3 billion in 2012 to USD 2.25 billion in 2013, ranking 6th in the world. In 2014, Mexican consumption is expected to drop by 8% to USD 2.08 billion.

In 2012, India experienced the largest drop in ranking from the 6th to the 11th. In 2014, India is expected to maintain a declining trend but smaller extent.

As for per capita consumption, Switzerland ranked first, hitting USD 135.7 in per capita consumption. India has the lowest ranking and her per capital consumption is around USD 1.2. Ranking from 2nd to 10th include South Korea, Germany. Taiwan, Austria, Czech Republic, Italy, Japan, Canada and Sweden, where per capita consumption dropped from USD 89.5 to USD 28.3.

With USD 8.4 in per capita consumption (USD 24.0 before adjustment), China ranks 25th while the USA ranks 12th with USD 25.3 in per capita consumption.

Global machine tool production

In 2013, global top 5 machine tool producers remain the same but only China’s ranking remains unchanged. Germany became the largest machine tool producer in the world and this was the first time for Germany to get this ranking since 2009. In 2013, Germany accomplished 5% growth rate in machine tool output value.

After ranking 1st for the continuously 3 years, Japan ranked second in 2013 and her machine tool output value dropped 33% to USD 12.33 billion; China maintained her 3rd position in ranking but experienced some decline in production in recent 2 years; In 2012, Italy dropped out of the top 5 but increased to the 4th in 2013 and her output value in the past 3 years remains basically unchanged; South Korea dropped by 1 position to the fifth in ranking and her output value in the past 3 years remains basically unchanged, exceeding USD 5 billion for continuously 3 years for the first time.

Global machine tool trading

In 2013, the above 27 machine tool producers earned USD 44.94 billion from machine tool export, declining by 10% on YOY basis and Japan experiencing highest decline rate; on the other hand, import decline is mainly attributable to shrinking demand from China and India.

Top 10 exporters

In 2013, global top 10 exporters exhibited the same ranking as the previous year. In YOY change based on USD calculation, Germany maintained the level of the previous year; Japan experienced dramatic decline up to 32%; Taiwan experienced 16% decline in export; South Korea underwent 13% decline while Switzerland experienced 5% decline. On the other hand, Italy, China and USA experienced 3% growth; Spain witnessed 11%, a growth rate higher than any other; Belgium also witnessed 4% growth.

As for YOY change based on local currency calculation, Germany, Japan and Switzerland witnessed 3%, 18% and 5% decline respectively; Italy maintained the same level as previous year; Spain and Belgium witnessed 7% and 1% growth respectively.

Ranking for the top importers remains unchanged

In import, China, USA and Germany remain the top 3 importers; but in 2013, Mexico and Russia witnessed dramatic growth in import demand and their ranking climbed from the 7th and 9th in 2012 to the 4th and 5th in 2013. Brazil still ranks 6h; South Korea dropped 2 positions to the 7th; Turkey still ranks 8th; France climbed one position to the 9th; and Italy was elbowed out of the top 10 ranking. India that ranked 4th dropped to the 12th in 2013.

Import rate (import/consumption) is 95% for Russia, 91% for China and 89% for Mexico and Brazil; above 90% for UK, France, Portugal and Australia. Countries and regions with lower import rate include Japan, South Korea and Taiwan, accounting for 19%, 31% and 39% respectively.

As shown in export rate and import rate, Belgium, Netherlands, Sweden, Denmark, UK and Czech exhibit a high level of participation in international trade. Particularly, Belgium features up to 637% in import rate and 294% in export rate. In terms of foreign trade, Belgium machine tool industry has advantages in transit trade. Other countries engaged in machine tool transit trade include Netherlands, Sweden and Denmark. On the other hand, Czech leverages low cost to sign production agreement with Germany to participate in international trade.

China improves competitiveness in trade

In terms of gap between import and export, China features greatest imbalance in trade and USD comes next with trade deficit continuing to increase.

Japan, Germany, Italy, Taiwan and Switzerland are machine tool export oriented and next come South Korea, Spain, Austria, Czech Republic, Belgium, Finland and Netherlands, 12 countries (regions) in total. In 2013, trade deficit dramatically decreased for Japan; slightly increased for Germany and Italy; slightly dropped for Taiwan, Switzerland and South Korea.

In terms of trade competitive advantage, Japan features highest Trade Competitive (TC) Index and next come Taiwan, Italy and Switzerland. Germany ranks 5th and next come Spain, Austria, Finland, Czech Republic and South Korea. In 2013, Japan, Taiwan and Switzerland witnessed some decline in TC while Italy, Germany, Spain and Austria witnessed some improvement in TC.

India is the least competitive and next come Mexico, Russia, Argentina, Brazil and China. Compared with 2012, China, Argentina, Russia, Brazil, Mexico and India witnessed some improvement in machine tool TC in 2013. Of these countries, China made fastest improvement in TC from -0.66 to -0.57.