Machine Shops
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 17,300 machine shops in the US process various materials, such as metal, plastic, or composites, to produce custom parts. Companies may specialize in a particular process (such as lathing) or an industry (such as automotive). Most projects are low-volume and require high precision. The industry consists of small- to medium-sized businesses – no large companies dominate.
Dependence on Manufacturing Sector
Demand for goods produced by machine shops is cyclical and highly dependent on the state of the manufacturing industry.
Dependence on Skilled Labor
Operating machine shop equipment requires a blend of technical knowledge and experience.
Industry size & Structure
A typical machine shop operates out of a single location, employs about 15 workers, and generates about $2.3 million annually.
- The machine shop industry comprises about 17,300 companies that employ 267,000 workers and generate $39.6 billion annually.
- Customer industries include aerospace, automotive, transportation, consumer electronics, and various equipment manufacturers (farm, medical, recreational).
- The industry consists of small- to medium-sized businesses - no large companies dominate.
- Nearly a third (32.2%) of US machine shops are in California, Texas, Ohio, and Michigan.
Industry Forecast
Machine Shops Industry Growth
Recent Developments
Mar 18, 2025 - Shop Class Stages a Comeback
- Shop class is being retooled to teach today’s students the technical skills required to fill the manufacturing labor gap, which could swell to 3.8 million workers by 2033, according to a report from Deloitte and the Manufacturing Institute. Leading-edge school districts are investing tens of millions of dollars to update and expand high-school shop classes for the 21st century, The Wall Street Journal reports. Vocational classes are preparing students for careers in the trades by working with wood, metals, and machinery as hands-on skills stage a comeback amid high college costs and AI’s threat to white collar job. Cutting-edge facilities – outfitted with computer-controlled machine tools and robotic arms – are attracting students at a suburban high school in Wisconsin, where about a quarter of its 2,300 students have signed up for at least one of the courses in construction, manufacturing, or woodworking, WSJ reports.
- US manufacturers reduced their new orders for metal cutting, forming, and fabricating equipment by 29.8% from December to January, according to the latest US Manufacturing Technology Orders (USMTO) report from the Association for Manufacturing Technology (AMT). The steep decline reversed several months of improving demand but compared well to the same period in 2024. January new order volume from contract machine shops (aka job shops) fell more than 30% from December. Job shops had demonstrated some demand growth during the last quarter of 2024. The January USMTO report revealed the decline in demand was more severe in the Northeast, Southeast, North Central-West, and South Central, with each region reporting month-to-month order values for metal-cutting falling by double-digit percentages – by as much as -52.1% in the Northeast and Southeast regions. The West posted a more modest 8.7% decline, while the North Central-East fell by just -0.7%.
- December marked the third consecutive month of metalworking improvement as measured by the Gardner Business Index’s (GBI) for Metalworking, which tracks the current state of metalworking and machining activity. The metalworking industry registered a GBI reading of 46.9 in December. While still indicating contraction, the recent upward trend points to a possible bottoming out of the current contractionary cycle that began in early 2023, Modern Machine Shop reports. Supplier deliveries was December’s strongest index component, showing gains month-over-month and versus the previous year, while other components including employment and exports contracted versus the previous month, per MMS. The GBI Future Business Index – a look at the future state of the metalworking market – surged to 68.1 in December, its highest level in recent years. The dramatic improvement in sentiment suggests growing optimism among metalworking manufacturers regarding business conditions over the next 12 months.
- US manufacturers have much to lose in a trade war erupts between the US and its largest trading partner Mexico, The New York Times reports. During his campaign, President-elect Donald Trump vowed to slap 25% tariffs (or higher) on all goods from Mexico unless it stopped the flow of migrants and drugs to the US. While Mexico depends heavily on trade with the US – exporting some 80% of its goods to America – it accounted for nearly 16% of overall US exports in 2022, according to the Office of the US Trade Representative. Tariffs on Mexico and China, another Trump target, would have widespread ramifications for manufacturers, making it more expensive to produce goods that use foreign materials and components. And if other countries respond with retaliatory tariffs, it could also make it more expensive for manufacturers to export goods to foreign markets, according to Manufacturing Dive.
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