Machine tool consumption continues to rise in 2013

Under normal circumstances, the metal processing industry lags behind the rest of the economy. However, due to the collapse of the financial industry, the metal processing industry and manufacturing industry have been leading the U.S. economic recovery. This unusual situation is mainly due to the return of U.S. manufacturing to the home country. U.S. production manufacturing has returned to the United States after over the past decade of outsourcing production.

There are many reasons for returning to local production activities, including high transportation costs, slow supply chain logistics, poor quality, rising costs of overseas labor, and falling energy costs in the United States. In addition, the general development trend is: where the products produced will be sold in the market.

However, returning to indigenous production is not a sufficient reason to reflect the significant rebound of the metal processing industry. Another factor is the consumption of durable goods, which is the most important leading indicator for the development of the metal processing industry. The consumption of durable consumer goods has now reached an unprecedented new height, much higher than the peak level that occurred in 2008 before, and has since continued to grow at an above-average rate. Changes in the growth rate of industrial production of consumer durables and consumer durables in various years (their growth rate is comparable to that of the same period of last year). The show shows that spending on durable consumer goods has led to a time-out of 0 to 6 months for durable consumer goods industrial production. The strong growth in consumption over the past two years has led to a strong growth rate in industrial production. The annual growth rate of industrial production has reached 8.7%, which is the fastest growth rate since the 1990s. Moreover, as the consumption of durable consumer goods grows at a faster rate, the entire 2013 industrial production will surely grow with stronger development momentum.

In short, the dramatic increase in the return to local production and the consumption of durable consumer goods has greatly increased the utilization rate of metal processing equipment. In 2009, capacity utilization has dropped to 61%. According to Gardener Publishing's "Capital Consumption Survey", the current capacity utilization rate has exceeded 80%. During a normal 3-year period, capacity utilization can increase by 5% to 7%. Therefore, the increase in capacity utilization by nearly 20% can be said to be unprecedented.

The level of consumption continues to increase For machine tool consumption, capacity utilization and industrial production have just reached the best leading indicators level. Comparison of the rate of change of sales of durable consumer goods industrial production and machine tools. This shows that industrial production is on average 12 to 18 months ahead of machine tool sales. The rapid acceleration of industrial production of durable consumer goods in the past 10 months shows that the sales of machine tools in 2013 should continue to accelerate growth. According to our forecast, unit sales in 2013 will increase by about 11%.

Capacity utilization associated with machine tool sales. With the increase in capacity utilization to 80%, we expect the sales of machine tools will reach US$6.6 billion. The red line represents the best demand for any capacity utilization machine. So far, we rarely see the sales of machine tools to the best level. This is because it is impossible for metal processing companies to purchase only one part of the machine tool. Moreover, the processing shop also tends to purchase metal processing equipment that is more than they need, and then increases the capacity of these devices in their own way. Therefore, metal processing companies may become more than the acquisition of the market, but also may become less than the scope of the purchase of the market. It can be seen that each point above the best line represents a metal processing enterprise that exceeds the scope of purchase; each point below the best line represents a metal processing enterprise that is below the scope of purchase. After careful study, it is concluded that the points above or below the optimal line tend to be arranged in increments of 3 to 5 years.

Machine sales in 2011 and 2012 are estimates and these estimates may be high. This is because it is most likely not an estimate for a single year (eg, 2010), and if it is above it and the year after it is, it may be below the best line (or vice versa). If the actual sales in 2011 and 2012 are lower than this line, then there will be three consecutive years (including the potential fourth year of 2013) to make the sales of the machine tool less than the purchase range. This means that during the period from 2014 to 2018, there should be a period where the purchase of machine tools exceeds the best demand.