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China Leads Machine-Tool Consumption

April 1, 2007
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LARCHMONT, NY-Four years ago China moved from fourth to first place in global consumption of machine tools. Since then it has retained that position and even strengthened it, ahead of other principal users such as Japan, the United States and Germany.

According to the most recent annual survey of production and trade in that class of equipment, Chinese factories installed an estimated $12.9 billion in machine tools in 2006, once again out-investing their competitors.

Chinese consumption gained 20% in a year that saw most other industrialized nations making investment increases in the low single digits. Japan, the second-largest market for machine tools, slipped 4% in new installations when measured in dollars.

The United States, the world’s third-largest market, saw consumption gain 5% over 2005. Throughout the 1990s, the United States had been the world’s leading purchaser of machine tools, but it saw a sharp decline in consumption during 2001, followed by another drop in 2002 and then started to rebound in 2003.

Machine tools such as lathes and presses are the basic building blocks of manufacturing. They are used in durable-goods industries to make items ranging from aircraft to appliances as well as other, more specialized, production machinery. In the survey, each country’s consumption is calculated as its domestic output, plus its imports and minus its exports.

On the output side of the study, the World Machine Tool Output & Consumption Survey shows that countries with substantial machine-tool-producing industries created $59.2 billion in equipment last year. That represents a 10.3% increase from the $53.7 billion those same 29 countries shipped in 2005.

In terms of production, Japan retains the lead for 2006 with total shipments of $13.5 billion, ahead of Germany with $10.3 billion. The two countries had run neck-and-neck for the title of the world’s leading producer since 1991 when East Germany and West Germany were combined. China made substantial gains in production in 2006, and now firmly holds third place in output, ahead of Italy and South Korea. Others in the top 10 ranked by production are Taiwan, the United States, Switzerland, Spain and France.

As a bloc, five Asian nations-Japan, the People’s Republic of China, Taiwan, South Korea and India-account for $28.7 billion, or 48.5%, of the survey total production; that is a gain of one percentage point of total world share compared to a year ago.

The statistics are cited in the 2007 World Machine Tool Output & Consumption Survey, the annual study released by Gardner Publications Inc. Editors of the annual survey, which began in 1965, assemble figures from trade associations, government agencies or major producers in the 29 countries that account for an estimated 94% of the total world shipments. Results of the 2007 study are posted on www.gardnerweb.com/consump/survey.html.

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