The news was outstanding for the manufacturing technology market in April and May. U.S. manufacturing technology orders (USMTO) showed a stellar 30% rate of growth between the first quarters of 2020 and 2021, and the April 2021 edition of Oxford Economics’ Global Machine Tool Forecast* is a glowing forecast for 2021 consumption. Mark Killion, director, U.S. industries at Oxford Economics, underscored the optimism in an AMT webinar at the end of May, when he predicted that 2021 will be up dramatically from 2020 and that 2022 growth, while less dramatic, will continue at a significant pace. The only piece of bad news was the shortages of production materials – steel, aluminum, titanium, etc. – to machine with the new equipment.
Oxford Economics’ Global Machine Tool Forecast
The Oxford Economics report projects a 15% increase in global machine tool consumption in 2021 followed by another 8% increase in 2022. The forecast for the Americas is 15%, which happens to be about the same as the decline in consumption in 2020. Brazil’s 8% increase may be half the average but will leave consumption in 2021 higher than it was in 2019, which will not happen in the other major American markets. Even though the Mexico growth forecast is 23% and the United States is looking at a 15% increase, these markets will end 2021 still 3%-10% short of their 2019 consumption levels.
Turning to international markets with growth rates that will generate a 2021 market greater than their 2019 market, Turkey tops the list with a 2021 forecast for consumption (shipments) that is 89% greater than 2019. Top machine tool markets that will be larger in 2021 than 2019 include China, Taiwan, Brazil, and Russia. The projections paint a market picture of all the top global markets back on track with pre-pandemic machine tool market growth models by mid-2022. The customer industries that will bounce back the fastest and strongest on a global basis are the electronics industries, particularly in chip fabrication, contract machining, light vehicles, and construction and off-road equipment.
May Webinar: Outlook for US Manufacturing and Machine Tools
In the May webinar, Mark Killion presented Oxford’s latest forecast for manufacturing technology orders in the United States. While the expectations for U.S. consumption is expected to be up 15% in 2021, the forecast for orders is expected to increase by 43% in 2021, suggesting that supply chain issues are likely to lead to a backlog situation as we move into the summer months. Killion stated that the strongest markets will be in contract machining, military and space equipment, medical equipment, electrical components and equipment, and home appliances. However, he spent a significant part of his presentation on the outlook for off-road and highway construction equipment, including agriculture equipment. The sector is already seeing significant growth in the past two quarters and is expected to blossom with the passage of an infrastructure bill by Congress in 2021.
The webinar recording and slides are available on AMT’s website. Click on “Resources” on the homepage, then click on “Webinars.” Scroll down the list chronologically to May 20, 2021 – “Outlook for US Manufacturing and Machine Tools.” You can skip straight to the good parts by going through the slides and indexing the forecast tables.
USMTO’s April report
Finally, I hope you are tuning in to the USMTO monthly report released the second Monday of every month on AMT’s LinkedIn page. In case you missed the April video, here are the four key takeaways:
There was a significant increase in the percentage of customers permitting in-person meetings.
Backlogs are growing in every element of the market’s technology and sophistication levels.
Big companies are weighing in with orders for large projects in greater numbers.
Converting quotes to orders is slowing as material shortages become more severe.
I encourage you to check out the market outlooks AMT brings to you on a regular basis. The combination of market intelligence and outlooks available to our members can help you strategize and grow in these challenging times.
Members only: Oxford Economics’ Global Machine Tool Forecast report
I encourage anyone interested in foreign markets to check out Oxford Economics’ Global Machine Tool Forecast report. If you’re a member, it’s already in your AMT inbox. Log in to AMTonline.org and click on “My AMT” next to the logout link. You’ll be directed to your personal My AMT page, where you’ll find “2021 Q2 Global OEF MT Forecast” just above the “My Groups” bar.
The Oxford Global Machine Tool Forecast, which analyzes global machine tool sales by country and major customer industries, is cosponsored by more than 20 national manufacturing technology associations from around the world and is published in April and October. Each association determines how to distribute the report to their membership. AMT utilizes the information in the reports to create content in member-only publications, speeches, and presentations. AMT is making the entire report available to members at no charge this year in anticipation of Oxford’s updated forecast at The MFG Meeting and MTForecast combined event in Denver, Colorado, November 2-5.
If you have any questions, don’t hesitate to reach out to me at pmcgibbon@AMTonline.org.