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3 Things to Know About the Machine Tool Industry

Posted by IndustrySelect on Friday, November 8, 2019

Man uses machine tools in a factory

3 MIN. READ

Manufacturing markets - and the companies that comprise them - are in an interesting position right now.

The 2008 Great Recession crippled the growth of many U.S. manufacturers, leaving them stagnant. In 2009, when the effects of the recession were felt globally, its impact on the manufacturing market was even more significant.

However, manufacturers resumed historical growth as the recession tapered off. Today, most manufacturers have recovered, and many are more successful than ever before.

At the same time, the future of manufacturing - particularly in the US - is murky. A predicted 2020 global recession could once again stand to cripple manufacturers.

In the U.S., President Donald Trump's steel tariffs have already cost the steel industry over $5.7 billion. More importantly, these materials tariffs have had a significant impact on manufacturers' ability to acquire equipment and produce products.

Additionally, manufacturers today have to deal with more rigorous competition than ever before. Given the tenuous state of the industry overall, it can be difficult for salespeople and marketers to pinpoint prospects - and, more importantly, to determine what those prospects need from providers.

Today, we'll be covering what salespeople and marketers need to know before talking to prospects in the machine tools industry.

1. The Global Machine Tools Market is Booming - and China is Dominant

In 2018, the machine tools market was valued at $106 billion. That value is expected to increase at a compound annual growth rate (CAGR) of roughly 6%, eclipsing $150 billion by 2024. The CNC machine tools market alone is predicted to be worth $101.13 billion by 2025.

A CAGR of 6% over the next five years indicates a booming industry. However, not all machine tools exporters and importers are reaping the benefits of the market's growth equally.

China currently dominates the market, holding 32.5% of the global share. That's up from 31.9% in 2016. Comparatively, the U.S., which also acts as the runner-up, holds just 11.1% of the global share. Germany, in third place, owns 8.3%.

2. China's Dominance Has Repercussions for U.S. Manufacturers

China's dominance of the machine tools industry doesn't necessarily bode well for U.S. manufacturers, particularly for metalworkers.

U.S. machine tools consumption is predicted to value $7.7 billion in 2019. While that's significant, manufacturers are also having difficulties obtaining new machinery due to China's dominance of the market.

Since China holds so much of the market, it's a more valuable target for most providers. Many U.S. manufacturers have been unable to obtain machinery. As a result, providers who target the U.S. market exclusively may find unexpected success.

3. Machine Tools Makers Look to Technological Innovation for Continued Success

Expect to see more and more machine tools manufacturers focus on producing cutting-edge equipment.

As automation and the Internet of Things continue to be the hottest trends in the manufacturing industry at large, machine tools makers will create products that fit into those systems.

Providers that help these manufacturers achieve the goal of technological advancement will find a healthy market waiting with open arms.

Looking for Machine Tool Propsects?

If you're a salesperson or marketer trying to get ahead with machine tools prospects, IndustrySelect can help!

IndustrySelect subscribers receive access to data points about opportunities, including the contact information of hard-to-reach decision-makers. IndustrySelect provides access to MNI's database of 400,000 U.S. manufacturers on a subscription basis, providing detailed profiles of each company. Subscribers can select up to 30 data points on any manufacturing company in the U.S. to help identify or pre-qualify leads. To learn more about IndustrySelect or to try our free demo, visit our website.

 

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