Global Machine Tools Market to Reach US$80.7B by 2015

World machine tools industry is sensitive to changes in the economic and financial climate. Demand responses to economic ups and downs are typically amplified in this industry highlighting the level of sensitivity to the broader economy. Changes in production capacity utilization, capacity expansions, and the level of business confidence strongly influence demand in the marketplace. Therefore, not surprisingly, machine tools industry confronted its toughest challenge ever thrown up by the financial crisis induced world economic recession. With the manufacturing sector stumped by deteriorating business fundamentals order intake for machine tools declined. Reduced engineering activities resulted in softening demand for tooling and machining equipment. Being capital goods, machine tools have been especially affected by the paralyzed credit system. One of the causalities of the recession has been the capital goods sector, which received the hardest blow from the financial hardships inflicted by the recession. Machine tools came under the yoke of the recession, with freezing of capital expenditure in the manufacturing and industrial sectors negatively impacting sales. The extreme sensitivity of the machine tools industry to the economic downturn can be traced to its heavy dependence upon end-use industries, such as, manufacturing, automobile and housing.

The meltdown witnessed in the housing and automobile sector stifled opportunities for most types of machining equipment, while production cutbacks and decline in the manufacturing sector eroded the immediate need factor. Slowing levels of economic activity, complete collapse of global production & trade, fall in industrial production, commercial activity, plant closures, capacity idling, scaling back of operating capacity, and the resultant sputtering investments in industrial production resulted in broad based declines in machine tools. Fall in the business confidence index, tighter lending standards, rising borrowing costs, drying up of debt markets and the resulting shortages of credit availability to finance investments in new machinery, new plant establishments, upgradation, renovations, and refurbishments, represented common woes that cut through all end-use sectors, thus weakening new and replacement demand. In addition to postponement of scheduled deployments of new machinery in production facilities, and lengthening of the replacement cycle, the market was also acutely impacted by increased end-user negotiations for longer lead-times, which resulted in increasing the time period between order quote and final purchase, thus squeezing revenues further.

However, with the recession now at its tail end, resurgence in growth fundamentals will aid in steady recovery in the upcoming years. The sheer diversity of application areas for machine tools ranging from aerospace, automobiles, process industries, wind power generation to mining, and oil exploration industries, will help ensure a quick recovery. Improving economic conditions will unleash pent-up demand as hitherto postponed purchase decisions resurge to provide commercial opportunities. Recovery will be led largely by emerging markets such as China and India.

Europe and Asia-Pacific account for a lion's share of the global Machine Tools market, as stated by the new market research report. While demand softened across all regional markets, the only bright spots in the market, during the period, has been the developing Asian countries like China, and India, primarily because of the massive levels of decoupling between the developed and developing countries. For instance, while developed countries sank into a deep abyss, developing countries withstood the pressure as manifested thanks to their stronger fiscal and balance of payments positions which partially cushioned the impact of the external shock. Less impacted level of economic activity in developing countries has propped up the manufacturing sector at large. Market for Metal Cutting Tools in Asia-Pacific is expected to surge at a CAGR of 6.6% during the analysis period.

North American machine tools market has shown signs of gradual strengthening, with production and demand moving higher in recent months. In the industrialized countries, the machine tool market is mature and growth opportunities typically revolve around replacement demand. Creaking production infrastructure, and aging machine tool bases in many of the industrialized nations require to be upgraded and modernized, thus promising attractive opportunities in the upcoming years. As a result, market for Special Machine Tools in United States is expected to register steady growth patterns in the post recession period. Several machine tool makers have also started to reduce their reliance on traditional automobile and components sector, and are much more focused towards recession resilient sectors such as the large government contracts, power sector, and public sector enterprises for orders.

Key players covered in the report include Agie Charmilles Management Ltd, Allied Machine & Engineering Corp, Amada Group of Companies, Cincinnati Automation & Test, Doosan Infracore Co. Ltd, FANUC Ltd, Giddings & Lewis Machine Tools LLC, Gildemeister Aktiengesellschaft, Hardinge Inc, Kennametal Inc, Makino Milling Machine Co. Ltd, Mori Seiki Company Ltd, Okuma Corporation, Otto Bihler Maschinenfabrik GmbH & Co. KG, Shanghai Machine Tool Works, Sodick, Inc, Spinner Werkzeugmaschinenfabrik GmbH, TAJMAC - ZPS, a. s., Trumpf GmbH + Co. KG, Walter AG and Yamazaki Mazak Corporation, among others.

The research report titled "Machine Tools: A Global Strategic Business Report," by Global Industry Analysts Inc., provides a comprehensive review of market trends, drivers, product overview, competition, product introductions/innovations, and recent industry activity. The study offers market estimates/projections (in US$) for regions such as United States, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia, and Rest of Europe), Asia-Pacific (China, India, South Korea, Taiwan, Rest of Asia-Pacific), Middle East/Africa and Latin America. Product Segments analyzed include Metal Cutting Tools (Boring & Drilling Machines; Gear Cutting Machines; Grinding, Honing, Lapping, Polishing, and Buffing Machines; Lathes; Milling Machines; Machining Centers; Station Type Machines; and Miscellaneous Tools), Metal Forming Tools (Punching & Shearing Machines; Bending & Forming Machines; Metal Working Presses; and Miscellaneous Tools), and Special Machine Tools (Water Jet Machines; Laser Machines; Electro Chemical Machines; Electrical Discharge Machines; and Coordinate Measuring Machines). The report also covers analytics by End-Use industries including Automobiles, Aerospace/Defense, Non-Electric Machinery & Equipment, Electronics/Electrical Machinery & Equipment, and Other Applications.