Machine Tool Markets See Minor Changes, U.S. Sees Growth

World Machine Tool Production Stays Steady While Consumption is Modestly Down in 2023

Global machine tool production was fairly stable while consumption fell some 5% across the top 50 industrialized countries in 2023. Specifically, overall machine tool consumption decreased from $83.0 billion in 2022 to $79.0 billion in 2023 while production decreased a little, from $86.2 billion in 2022 to $85.3 billion in 2023.

Of the top-10 machine-tool-producing countries, Germany, the United States, Italy and Spain posted year-over-year gains in real dollars (adjusted for currency exchange rates and inflation) over their 2022 levels, Spain to the tune of +22%. On the other hand, China, Japan and Taiwan posted declines in production, with Taiwan declining the sharpest, to the tune of -20%. The U.S. is the only top-10 machine-tool-producing country that is also a top-10 machine-tool-consuming country and experienced a 5% or more increase in consumption.

Spain and Switzerland join the U.S. in being up at least 5% in consumption, looking at the top-10 machine-tool-producing countries that are also among the top-20 machine-tool-consuming countries. Mexico and Turkey enter the top ten consuming countries, driven primarily by increases in imports.

Of the 2023 top-10 machine-tool-consuming countries, half of them post year-over-year declines in consumption. Taiwan declined the most (-28%) followed by South Korea (-16%).

The World Machine Tool Survey

These data come from the annual World Machine Tool Survey conducted by Gardner Business Media (publisher of Modern Machine Shop). Each year the Survey ranks the world’s top countries in machine tool production, consumption, imports and exports. For the ranking, Gardner’s Business Intelligence team takes reported or estimated machine tool economic data and adjusts for exchange rates and inflation to enable year-to-year comparisons in real dollars.

The top-10 producing countries were almost the same in 2023 as 2022, the only exceptions being Germany and Japan swapping positions, the former taking over the latter for the number-two producer spot in 2023. China ($27.4 B) is far and away the number-one producer, producing nearly 2.5 times as much as Germany ($11.4 B.) They were followed by Japan ($9.8 B), the U.S. ($8.1 B), Italy ($7.5 B), South Korea ($5.0 B), Taiwan ($3.2 B), Switzerland ($2.7 B), India and Spain, each at $1.5B. Germany held its position as top exporter, followed by China, which overtook Japan’s 2022 runner-up slot. Japan, Italy and South Korea follow in third, fourth and fifth, with South Korea taking Taiwan’s former position.

China was also the world’s top machine tool consumer by a wide margin at two times the U.S., $25.7 B vs. $12.8 B, respectively. Another big gap in consumption followed behind them, in order, with Germany ($5.9 B), Italy ($5.2B), Japan ($4.0 B), India ($3.1 B), South Korea ($3.0 B), Mexico ($2.4 B), Turkey ($1.9 B) and Taiwan ($1.3 B). China fell as top importer in 2023, overtaken by the U.S. and followed by Germany, Mexico and Italy.

Analyzing the Data

The U.S. is alone among the top-six machine tool producers in showing growth across all four areas tracked by the WMTS: consumption, production, imports and exports. During the 2022-2023 period, the U.S. dollar experienced less inflation than many comparable economies, which may have contributed to the increase in imports and consumption.

Conversely, China and Japan declined across multiple metrics, with both nations seeing declines across three different metrics, including production and consumption. However, China reported strong growth in exports, providing some good news for Chinese OEMs.

The U.S., China, Germany, Italy and South Korea all experienced growth in exports over 5%, with China’s and Italy’s exports growing by 20% or more. Unusually, this growth in exports did not lead to an increase in imports for most of the countries included in our data. In fact, imports fell worldwide, with the numbers diverging sharply from exports. This may indicate that countries that typically go unaccounted for in the WMTS dataset may have increased their machine tool imports. If so, a possible explanation for this change is that countries that have historically had smaller machine tool industries may be shoring up their manufacturing base.

Methodology

This is the 56th edition of an independent, annual survey that collects statistics from countries that produce and consume machine tools, comparing their production and consumption in real U.S. dollars. It is conducted by Gardner Intelligence, the research department of Gardner Business Media Inc. (Cincinnati, Ohio). Criteria for inclusion in the report are: 1) the country has imported at least $100 million of machine tools over at least one year since 2001; and 2) the country’s data are provided or reasonable estimates can be calculated. Data are reported for 51 countries in the 2023 report. Total import, export and production data are provided by or estimated for, each country. Consumption is calculated by adding imports and production, then subtracting exports. The data typically are reported in local currencies, then converted to U.S. dollars. Historic data are adjusted for inflation using the U.S. Bureau of Labor Statistics’ Producer Price Index for capital equipment. This adjustment promotes more accurate comparisons over time.

For countries that do not report total imports and exports, data from the International Trade Centre (ITC) are used. ITC data are also used to report imports and exports at the machine tool category level for all countries. Estimates are calculated for production when data are not provided. Imports and exports at the machine tool category level typically sum to numbers less than or equal to the corresponding totals reported. Differences are driven by reporting the top five rather than all eight machine tool categories. In rare instances, imports and exports at the machine tool category level sum to numbers higher than the corresponding totals reported, likely a function of the machine tool category level data including parts and components that are not included in totals. This discrepancy can also be an artifact of using different data sources.