Industrial Machinery Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,900 industrial machinery manufacturers in the US produce the machines required to make other products. These can range from relatively simple mechanical modules that perform a single function to complex computer-controlled machines that perform multiple processing functions. Key customer markets are woodworking, metals, plastics, paper, textiles, bookbinding, printing, food, and semiconductor production.

Dependence On Exports

Exports account for about 67% of US industrial machinery manufacturers’ revenue and create additional risks for manufacturers.

Keeping Up With Technology Advances

In order to remain competitive, manufacturing processes are rapidly and increasingly becoming automated.

Industry size & Structure

The average industrial machinery manufacturer has 40 employees and produces about $13 million in annual revenue.

    • About 2,900 companies employ 116,000 workers and generate $38 billion in annual revenue.
    • 64% of firms have less than 20 employees.
    • About 236 facilities are very large, employing 500 or more workers.
    • Large companies include Siemens AG, ABB, Honeywell, and General Electric.
                                  Industry Forecast
                                  Industrial Machinery Manufacturers Industry Growth

                                  Coronavirus Update

                                  Nov 12, 2021 - Imports may Increase As Asian Factories Reopen
                                  • Asia’s factory activity increased in October as COVID-19 infections decreased, but rising input costs, material shortages, and slowing Chinese growth cloud the outlook. China’s factory activity expanded at its fastest pace in four months in October, the private sector Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. A PMI sub-index for output showed, however, that production shrank for the third straight month due to power shortages and rising costs. Factory activity expanded in Vietnam, Indonesia, and Malaysia in October as operations gradually normalized after being hit by shutdowns caused by a spike in COVID-19 infections. Taiwan saw manufacturing activity growth accelerate on robust chip demand, while Japan’s factory activity expanded at the fastest pace in six months in October in an encouraging sign for the world’s third-largest economy. Experts note, however that supply/demand equilibrium will not return soon. “While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.
                                  • About 83% of North American manufacturers who responded to a June survey by industrial sourcing platform and marketing firm Thomas are likely or extremely likely to re-shore, up from 54% in March 2020. “We are witnessing the wholesale reexamination of supply chain relationships, which will realign global manufacturing for decades to come,” said Tony Uphoff, Thomas president & CEO. Industrial machinery manufacturers are likely to benefit from an increase in domestic manufacturing.
                                  • While the procurement professionals surveyed by Thomas did identify challenges to sourcing materials locally, including barriers of price (40% of respondents) and speed (23% of respondents), the overwhelming majority of respondents still planned to re-shore operations.
                                  • The Federal Reserve expects economic growth, as measured by GDP, to remain above trend for at least two years to come, at 3.3% in 2022 and 2.2% in 2023, compared to estimated long-term potential growth of just 1.8%.
                                  • Industrial machinery manufacturing firms are likely to be significantly impacted by semiconductor shortages, as they often rely on low-tech chips that are currently among the most scarce. Low profit margins mean many manufacturers are reluctant to invest in facilities that make these chips. This, in turn, means that sudden spikes in demand put great strain on the entire chain, and the entire sector may be impacted by the disruption of a single factory.
                                  • New orders for durable goods decreased 0.3% in value month over month on an adjusted basis in September but increased 23.4% in value year over year on an unadjusted basis during the first nine months of 2021, according to the US Census Bureau. Year-over-year comparisons may yield atypical results due to the large drop in orders during the early months of the coronavirus pandemic.
                                  • Industrial machinery manufacturing industry employment increased 6.9% year over year in September, according to the US Bureau of Labor Statistics.
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