Despite Some Contraction, U.S. Machine Tool Market Will Remain Strong in 2020

Gardner Intelligence’s annual Capital Spending Survey reveals that job shops will continue to invest in new machining technologies.


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Gardner Intelligence is the research arm of Gardner Business Media. At its recent Cap Spending luncheon held in Chicago last week, Steve Kline, Jr., chief data officer, gave attendees an overview of the findings from the latest Metalworking Capital Spending Survey, revealing that while some contraction is already in motion for certain sectors as we head into 2020, there is also a lot of positive data that supports a productive year ahead.

The survey was conducted from mid-July to mid-August 2019, with 52,000 subscribers of MoldMaking Technology and sister companies Modern Machine Shop, Production Machining and Automotive Design and Production magazines polled about budgeted spending on such things as machine tools, software and other related equipment and supplies. The survey provides an overview of the U.S. machine tool market as it is projected to unfold over the next year and delivers more specific consumption data based on specific machine types, plant sizes and geographic regions in 13 industries.

Some takeaways from survey results shared by Kline during the Cap Spending luncheon included the following:

  • Specifically, Kline shared that when looking at CNC machining centers, about 18 percent of spending on new, vertical machining centers in 2020 will be on five-axis VMCs; and for horizontal machining centers, a full 24 percent of total spending is forecast. Job shops will lead the way, by far, for both types of five-axis machine tool investments.
  • One leading indicator, machine tool consumption, is projected to reach $6.993 billion, a decrease by almost five percent from 2019 spending on new machine tools. However, the long-term spending average on new machine tools is about $7 billion, so the industry won’t experience the larger dip seen in 2016, and we are nowhere near the recessional average seen in 2009 – 2010.
  • Another leading indicator, tooling consumption, projects that metalworking companies will spend about $5.284 billion on tooling, which is also lower than last year by over five percent. But similar to the machine tool data, consumption of tooling is expected to remain above the long-term average, which is $5 billion, supporting .
  • Kline says production levels for metalworking companies remain high but declining backlogs are making up for contracting new orders.
  • Kline also told attendees that the market will be competitive in 2020, but that IMTS will serve as a turning point. He explained that the biennial International Manufacturing Technology Show, which will be held September 14 – 19, 2020, in Chicago, is consistently a catalyst for boosting the metalworking industry because of the number of innovative and groundbreaking products that are introduced at the show.

“Newer technology drives profit margins at machine shops,” he said, pointing out that shops with a 14 percent or higher profit margin own machines with an average age of five years, while shops with a zero percent or lower profit margin own machines that are, on average, about 10 years old.

The full 2020 U.S. Capital Spending Machine Tools Survey can be purchased online at gardnerintelligence.com.