The pandemic accelerated the contraction in metalworking and extended the accelerating contraction in cutting tool orders. But, the GBI: Metalworking indicates the lows in cutting tool orders may be in the past.
After increasing machine tool purchasing for the past two years, 12 of the top 15 machine tool consuming countries decreased in 2019 in the midst of a worldwide downturn. But in a sign of reshoring, the U.S. increased its share overall, and machine tool purchasing by Mexico increased.
As automotive OEMs closed facilities and states closed non-essential businesses to help combat the coronavirus, significantly more manufacturers made adjustments to production/capacity in last week’s survey.
In the third week of the of the COVID-19 survey, manufacturers started making more significant adjustments to contingency plans, budgets/spending and staffing/hiring. However, production and capacity were relatively unchanged.
In the second week of a survey on COVID-19, manufacturers reported fewer changes to their business with less severe impact on their supplier lead times and parts availability with the lone exception of travel-related activities.
Spending by the so-called “marginal buyer” (typically a small shop that purchases machines on a discretionary basis) is the dominant factor in today’s market.
U.S. machine tool purchases rose in 2017, as shown by the 2017 World Machine Tool Survey. A global boom now makes it hard for U.S. shops to get new machines.
Metalworking companies, especially job shops, continue to invest more heavily in HMCs. This trend points to the inherent capability and flexibility of these machines for producing complex, high-value workpieces.