Worldwide demand for machine tools is projected to climb 5.5 percent per year through 2019 to $181 billion. Gains at the global level will be largely driven by market growth in China and other developing nations, where demand for durable goods is expected to post the strongest increases. This will result in additional investment in new manufacturing capacity and related machine tools in the Asia/Pacific region, the Africa/Mideast region, Eastern Europe, and Central and South America. China alone is expected to account for more than two-fifths of all new product demand through 2019. A large portion of the outdated machine tools currently in use in developing countries will be replaced between 2014 and 2019 as production levels climb. Additionally, durable goods firms in developing nations will shift from using conventional machine tools to computer numerical controlled (CNC) models, adding to market value gains.

Product upgrades to drive demand in developed areas

Through 2019, machine tool demand in Western Europe, the second largest regional market worldwide, is expected to grow in line with the average worldwide pace, and Western Europe will account for nearly one-fifth of product demand gains through 2019. Market conditions in numerous regional countries are expected to improve as both overall economic growth and gross fixed investment accelerate. Growth will also be supported by the introduction of more expensive machine tools. In order to develop the next generation of durable goods, manufacturers in the region will invest in machine tools that offer increased control and precision. In Japan, the world’s fourth largest national market, demand for machine tools is expected to rebound with the release of pent up demand after several years of losses. Manufacturers in Japan are expected to build new plants and upgrade existing factories because of growing sales opportunities in a number of key export markets. As competition from producers in other countries intensifies, Japanese companies will invest in new machine tools.

Machinery market to be key demand driver

The large machinery market is forecast to account for one-third of all new product demand generated between 2014 and 2019. Multiple trends are expected to fuel growth. As discretionary incomes in developing regions rise, households will increase spending on a wide range of durable goods. In response, suppliers will expand existing production facilities and open new plants, leading to a rise in both industrial equipment sales and related machine tool demand. Economic growth in developed nations will stimulate durables manufacturing activity and drive sales of machine tools for industrial applications. In response to stiffer competition from countries with low production costs, suppliers of machinery in industrialized nations will develop a wide range of new, technologically advanced durable goods. The manufacture of these products often requires new machine tools that offer greater automation, precision, and control.

Study coverage

This Freedonia industry study analyzes the $138 billion world machine tool industry. It presents historical demand data (2004, 2009 and 2014) and forecasts (2019 and 2024) by product (metal cutting, metal forming, accessories and spare parts) and market (e.g., machinery, transportation equipment, primary and fabricated metals, electrical and electronic equipment) for six world regions and 17 major countries. Total demand is given for an additional seven countries. The study also considers market environment factors, details industry structure, evaluates company market share, and profiles 39 industry competitors.