This month’s column focuses on where U.S. manufacturing technology rests in perspective to international trends. Typically, the content looks inward to where the U.S. market is headed, what industries are driving demand or which are likely to have declining order patterns. The U.S. manufacturing technology industry and market has performed well coming out of the 2009 recession. Let’s take a look at how our nation is stacking up against the rest of the world. 

The U.S. manufacturing technology sector rebounded from the 2009 recession better than our major trading partners. While most of our major trading partners bounced back from 2009, the U.S. not only rebounded but set new records for both domestic consumption and production of manufacturing technology. As the charts show, U.S. domestic orders (consumption) set a historical peak in the third quarter of 2000, which was surpassed in the second quarter of 2011. Both Japan and Germany’s markets have grown considerably since 2009, but have not yet surpassed peak levels set in 2007 and 2005, respectively. The domestic production statistics are similar. The U.S. manufacturers of manufacturing technology set a peak level in the third quarter of 2000. That peak was surpassed by U.S. output in the second quarter of 2012. Germany surpassed its previous peak production level of 2007 in late 2011, while Japan has yet to meet their last peak production level set in the first quarter of 2008.

Another good benchmark on the health of the domestic manufacturing technology sector is its export levels. Over the past five years, U.S. exports of manufacturing technology have grown by 70 percent. The true surprise is the destinations for these exports. Mexico and Canada have long been the number one and number two export markets for our industry's products. That changed dramatically in the past few years. China is now the top export market for our industry and has grown to a level that exceeds the combined exports to Mexico and Canada. Exports to China grew by 130 percent over the past five years, second only to South Korea’s 108 percent growth during the same period. Also in the top 10 fastest growing export markets for U.S. manufacturing technology were Russia, India and Saudi Arabia. India’s growth rate has moved it into one of the top five export markets for our industry’s products based on volume. The remaining top five export markets ahead of India were China, Mexico, Canada and the U.K. 

Are we the dominant player in this industry again? Not yet. But the point is we are catching up. The U.S. is the second largest market in the world for manufacturing technology by a wide margin, but China’s market is still nearly three times as large as the U.S. The U.S. was the seventh largest producer of manufacturing technology in 2012. However, based on recently released U.S. Census data, U.S. production levels for 2014 lifted the U.S. two spots into fifth place. It’s always good to put the numbers in different perspectives beyond just “are we getting better or worse.” When “experts” say that the resurgence of manufacturing in America is a myth, perhaps the question to them would be, “If it’s a myth, then what are all these machine tools that are being ordered doing?” Just saying!

If you have any questions about the information above or if we can help you make a point with an audience through data and analysis, don’t hesitate to ask. You can contact Strategic Analytics or Pat McGibbon at 800-524-0475.