Machine Tool Consumption
At CPM Industries we design and produce the patterns and tooling needed to produce a casting and we even machine castings in-house. So as a pattern and machine shop, we go through our fair share of machine tools each year. Today I came across an interesting way of forecasting and analyzing the U.S. Manufacturing industry by the consumption of machine tools. If you think about it, most manufacturers use machine tools to produce their products at one stage or another in the manufacturing process.
In 2014, the world total consumption of machine tools was $75,332,500,000 which may seem like an enormous amount of money (which it is), but there are also over 7 billion people on this planet now. The United States alone consumed more that $8,056,300,000 worth of cutting tools in 2014, a 0.1% growth from 2013. The country that saw the most growth in machine tool consumption from 2013 to 2014 was Japan with a growth of 39.4% and $5,150,200,000 worth of machine tools. The largest consumer of machine tools in 2014 (and probably every year for the last decade or two) was China with $31,700,000,000 worth of machine tools... which was actually a DECREASE of 0.6% from the previous year. To put into perspective, the United States was the second highest consumer of machine tools behind China, a $23,643,700,000 difference. Yeah think about that for a minute.
In previous blogs, I discussed how many U.S. manufacturers are re-shoring their manufacturing operations from overseas back to the U.S.. The decision to bring their operations back to the U.S. are a result of increased costs associated with shipping overseas and the increased costs of labor in foreign countries. Combined the increased costs with the decreased quality of products and it is an easy decision to bring their operations back home. The 2015 forecast of Machine Tool Consumption (according to Gardner Business Media Inc.) goes right in line with those re-shoring efforts. The global consumption of machine tools is expected to relatively stay the same at around $75 billion, but the United State's (and North America as a whole) is expected to increase.
An increase of 29.2% is expected for the United States which equates to a total consumption of $10,412,400,000. The three countries in North America are expected to see a combined increase of 24.2%, while every other continent that consumes machine tools is expected to see a decrease (South America: -34%, Europe: -0.7%, and Asia: -5.4%). China is expected to see a -9.8% decrease to $28,600,200,000 in consumption and I would assume that is due to the economy combined with U.S. re-shoring efforts. If these estimates are accurate... get ready America, Canada, and Mexico you'll have plenty of work.