Wednesday | 09 October, 2013 | 12:49 pm

Metalworking machinery demand rebounds

By Gretchen Salois

As manufacturers recover from the recession, machinery investment is expected to rise

October 2013 - Since 2009, industries fueling the metalworking machinery manufacturing sector stalled. According to IBISWorld, revenue fell a crippling 30.8 percent as the recession affected the global economy, curbing demand in foreign and domestic automobile and construction sectors. However, the research firm’s latest report indicates growth will return in 2013 with revenue rising 2.4 percent to $29.9 billion.

In its “Metalworking machinery manufacturing in the U.S.,” report, IBISWorld expects private investment in metalworking machinery to total $27.8 billion in 2013, up from $21.9 billion in 2009. Demand is expected to remain steady. However, “Competition from cheaper imports has undermined the efforts of domestic manufacturers, and the number of industry operators has fallen at an annualized rate of 2.8 percent to 6,495 during the past five years.”

Growth for the industry is fueled by demand from automotive and heavy machinery manufacturers as well as increased government spending on defense and military/aviation measures. Commercial aviation and automotive sectors, which were hit hard by the recession, are recovering steadily. International trade remains an important factor as exports are estimated to account for 23 percent of revenue, or $6.9 billion, according to the report. 

James Crompton, analyst at the business intelligence firm, says while automotive is a particularly strong influence on this sector, other industries that provide steady demand to the metalworking machinery manufacturing industry include: ship building (as component parts need to be worked and shaped), steel (and other metal), pipe/tube manufacturing, architectural and ornamental metalworking services. Additionally, machine shops, which cut raw materials into specific shapes and sizes, are primary users of metalworking machinery.

According to IBISWorld, special tools, die sets, jigs and fixtures account for the majority of industry revenue at 34.4 percent of the total $29.9 billion. Industrial mold manufacturing, manufacturers of die sets and jigs, as well as special molds needed to mass produce goods, account for 20.4 percent of total industry revenue. Cutting tools and accessories, which account for 19.3 percent of revenue, include metalworking attachments, bits, inserts, tips, drills and shanks that can be used in machining centers and mills. Other products account for 2.9 percent of total industry revenue, covering rolling mill machinery, special-purpose assembly machines, synchronous and nonsynchronous rotary- and inline-transfer machines, separately sold parts and miscellaneous machines.


Global effect and expertise

On a global scale, China’s impact on the marketplace is significant as its demand for mineral and energy resources grows. Factors such as offshoring operations as well as worker expertise will have a significant impact on the future of the sector. Technological and automated innovations such as computer-aided design, computer numerical control and computer-aided manufacturing systems have given a competitive advantage to companies invested in these forms of technology, particularly in Asia (Taiwan, Japan and Korea), says Crompton. 

As a result, inflated commodity prices have led mining companies to invest in resource exploration, requiring additional equipment. Due to the lack of major metalworking machinery manufacturers in the United States, it is difficult to say if there is a particular brand or company that consumers demand as research indicates most demanded machinery is from Japan, Crompton says.

“Japan has consistently been a leading import source for the industry, and USITC data going back to 1998 shows that Japan has not once lost its position as a leading import source for metalworking machinery,” Crompton says. “Its level of imports are expected to grow at an annualized rate of 2.9 percent in the period from 1998 to 2013. Ultimately, I would say that it is not a matter of offshoring production for cost purposes, but more of a shift towards maximizing efficiency of operations.” 

The report also indicates that imports and exports of metalworking machinery have risen since 1998, total imports by 3.6 percent on an annualized basis and total exports by an annualized 1.6 percent basis from 1998 to 2013, according to Crompton. 

Both in North America and abroad, the increased use of computerized machinery is creating demand for more technically literate employees, he adds. “CAD and manufacturing machines require employees to enter specifications into the machine and if an employee is not able to consistently operate the computer systems effectively, there can be deadweight loss in operations,” Crompton says. 

Going forward, Crompton believes the emergence of 3-D printing technology could potentially influence this industry. “While it is still a nascent industry, the implications moving forward could be immense across all manufacturing industries,” Crompton says. “Most notably, if 3-D printing technology becomes capable of manipulating and forming metal products, it could spark a massive shift in how metalworking machinery manufacturing companies develop and design machinery.” MM

Current Issue


October 2014

Gearing up for 2015
Tackling foreign policies, regulations, trade balances and capital plans, here are forecasts for virtually everything.





Modern Metals on Twitter

White Papers

More White Papers >

Industry Partners

Alloy Bar Products

Custom Rubber Products

Metals Distribution

Service Centers

Sierra Alloys Royal Rubber Co. ThyssenKruppnMaterials NA Heidtman Steel Products


Cutting Software

Perforated & Expanded Metal

North American Steel Alliance
Channel Alloys SigmaTEK Systems McNichols Co. Reliance Steel & Aluminum Company


Cutting Systems

Plasma Technology

Thickness Gauges

Gerdau Messer Cutting Systems, Inc. ESAB Welding & Cutting Products Compusource Corporation




Enmark Systems, Inc.
Steelmax Hougen Manufacturing, Inc. Allor Manufacturing Inc.

Stainless Steel

CNC Cutting (Plasma, Waterjet, Laser, Router)

Financial Services

Artco Group Stainless Sales Corp.
Multicam Inc. BMO Harris Bank Churchill Steel Plate Ltd Straub Metal International

Coated Coil

GE Capital Finance Ranger Steel

Stainless, Nickel, Aluminum, Pipe, Tube & Bar

American Nickeloid Metals

Investment Banking

Precision Grinding

Prudential Stainless & Alloys, L.P.
Centria Coating Services Brown Gibbons Lang & Company Joco Precision Grinding


Metal Coaters

Laser Technology

Profiling Software


Coil Processing

AltaMAR, Inc. FastCam Pty Ltd. Central Steel Service, Inc.
Bradbury Group Amada America, Inc.

Rolled and Extruded Aluminum Products

Parker Steel Co.
Braner USA LVD Strippit Aleris Rolled Products SSAB
Burghardt + Schmidt GmbH Mitsubishi Laser-MC Machinery Systems, Inc.

Sawing Technology

Summit Steel Corporation
Butech Bliss

Machining Centers

Behringer Saws, Inc.

Steel Fabrication

Formtek-Maine Handtmann CNC Cosen International, Inc. Voortman Corporation
Herr-Voss Stamco

Material Handling

Cut Technologies Metal


IMS Systems, Inc. Canrack Metal Center Systems DoALL Sawing Products TSI Titanium
Leveltek Samuel Strapping Systems HE&M Saw


Machine Concepts Steel Storage Systems Inc. Kasto Carlson Tool & Manufacturing Corp.
Red Bud Industries The Caldwell Group, Inc. Metlsaw Systems

Tube & Pipe


Metal Alloy Analysis & Verification Independence Tube Corp.

Copper & Brass

Thermo Scientific Niton Analyzers Scotchman Industries, Inc. National Tube Supply Company
Christy Metals Inc.

Metal Finishing & Deburring

Wikus Saw Technology Specialty Pipe & Tube
Farmer's Copper Supermax Tools


Turnkey Finishing System












TECHNI Waterjet


twitter facebook linkedin rss