Machine Tools and Metalworking Equipment
The U.S. machine tool and metalworking equipment manufacturing industries are comprised of companies that build machine tools, that manufacture machinery used to cut or form metal and other hard materials, and those that produce industrial tooling. A machine tool is usually defined as a non-portable, power-driven manufacturing machine or system used to perform specific operations on man-made materials to produce durable goods or components. It is designed specifically for metalworking either by cutting, forming, physico-chemical processing, or a combination of these techniques.
Machine tools are traditionally broken down into two categories: metalcutting and metalforming. Metalcutting machines typically cut away chips or swarf and include (but are not limited to) broaching machines, drilling machines, electrical-discharge machines, gearcutting machines, grinders, machining centers, milling machines, transfer machines, and turning machines, such as lathes. Metalforming machines typically squeeze metal into shape and include (but are not limited to) bending machines, cold-heading machines, presses, shears, coil slitters, and stamping machines. The industry is classified under NAICS 333512 (metal cutting machine tools) and NAICS 333513 (metal forming machine tools). Machines built by the industry are frequently classified into seven types: turning machines, such as lathes; shapers and planers; power drills or drill presses; milling machines; grinding machines; power saws; and presses. Machine tools are used in the process of manufacturing virtually all products, either directly or indirectly (by fabricating other machines, molds, or dies that are then used to create finished products) and are therefore critical to all manufacturing industries.
Industry Overview and Global Competitiveness
Machine tool shipments were $6.33 billion in 2006, a surprising 15.5 percent increase over the 2005 value of $5.48 billion (latest Census figures available). There are approximately 550 machine tool manufacturers in the United States, predominately made up of small- and medium-size enterprises. In the current economic crisis, many are barely surviving. 2008 figures will doubtless reflect a downward spiral of the machine tool industry and an overall decline in the number of operating businesses as a result of mergers, acquisitions and bankruptcies.
In 2008, U.S. exports were valued at $3.78 billion, an increase of 12.1 percent from 2007 figures of $3.37 billion. Mexico, Canada, China, and Germany remain the top four markets for U.S. exporters, composing nearly half of the market. Imports increased by 13.4 percent in 2008, totaling $6.38 billion. Most of these machines were imported from Japan (40 percent market share), Germany (16 percent market share), followed by Italy, Canada, Taiwan, and Switzerland. Japan is the world’s largest producer of machine tools, producing approximately one-fifth of the world’s value of machine tools, and the second-largest consumer, only after China. The quality and reputation of Japanese machine tool manufacturers as well as the ingenuity of German manufacturers allowed these competitors to increase penetration of the U.S. market and expand the industry’s trade deficit, while Italian, Korean, and Taiwanese firms capitalized on the price competitiveness of their machines. China remains the largest market for machine tools, followed by Japan, Germany and the United States. China remains one of the world’s most voracious importers of machine tools, as evidenced by a 9.6 percent increase in U.S. imports of machine tools over 2007 figures. China is also becoming more self-sufficient in the machine tool industry, but still lags far behind the export powerhouses of Japan and Germany in technology and quality. As the world’s leading consumer of machine tools, China will remain a primary market for the U.S. machine tool industry.
In 2007, the United States ranked seventh among machine tool producers, following such countries Taiwan, Korea, and Italy. The United States has lost some competitive advantages due to higher production and labor costs to manufacture in this country. However, a strong trend in economic growth in many foreign markets, such as Brazil, Russia, India, and China, may result in an increase in U.S. exports for machine tool manufacturers as long as U.S. companies can compete on a global scale with Japan, Germany, Korea, and China on price, quality, technology, competitive financing, and after-sales-service. Additionally, the United States needs to regain and maintain a technological edge in nanotechnology, smart machining, and other manufacturing technologies and innovations that increase productivity and reduce costs for end-users.