A mild recession in 2023 will nevertheless provide opportunities for more machine tool sales to durable goods manufacturers, according to Mark Killion, CFA, director of U.S. Industry at Oxford Economics, a leading economic advisory firm. Killion shared his outlook for U.S. machine tools at MTForecast, a recent conference sponsored by AMT – The Association For Manufacturing Technology.
“Every recession is painful, but this one will be less so than average for machine tool sales,” Killion said. “Companies need to be prepared for recovery after a short recession in order to take advantage of the growth and increase their market share.”
Killion’s forecast indicates that some industries with the greatest growth output in 2023 will include machine shops, semiconductors, automobiles, trucks, and utility vehicles. These areas are among the categories predicted to be least impacted by the recession and most likely to rebound quickly, offering opportunities for manufacturing technology companies.
“Although we continue to expect growth from traditional machine tool users such as aerospace and automotive, the future of manufacturing is in some of the faster-growing sectors such as electronics, communications, and medical equipment,” said Pat McGibbon, chief knowledge officer at AMT. “Strategically, it’s a good idea to diversify customer markets for the long term.”
Other longer-term trends supporting this positive outlook for U.S. manufacturing include the growing use of automation, the vehicle evolution to electric, lower-emission initiatives, infrastructure spending, government support of domestic semiconductor manufacturing, and supply chain reconfigurations.
To take advantage of these growth opportunities, Killion recommends using the recession period to adjust market targets to match trends, make investments to support new product mixes, and have a tactical marketing plan ready to execute during the recovery.
“It seems counterintuitive to make investments in the midst of a recession instead of saving, but that preparation may be necessary to gain the competitive advantage,” Killion added.