Metalworking Machinery Manufacturers

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 6,200 metalworking machinery manufacturers in the US produce metal cutting and forming machinery, dies, machine tools, jigs, and industrial molds. Major customers are machine shops, industrial machinery wholesalers, industrial supplies distributors, construction firms, oil and gas firms, mining companies, power companies, defense contractors, and manufacturers of vehicles, aircraft and aerospace components, ships, and a wide range of products that require the machining or molding of metal, glass, rubber, or plastic.

Competition from Used Equipment

Metalworking machinery manufacturers not only compete with one another, but also the used equipment market.

Weak Pricing Growth

Strong competition from domestic competitors and foreign imports have prevented metalworking machinery manufacturers from significantly raising their prices.

Industry size & Structure

A typical metalworking machinery manufacturer operates out of a single location, employs 26-27 workers, and generates about $4-5 million annually.

    • The metalworking machinery manufacturing industry consists of about 6,200 companies which employ about 164,000 workers and generate about $30 billion annually.
    • Most companies are small, independent operators - about 72% of establishments employ less than 20 workers.
    • Customer industries include machine shops, industrial machinery wholesalers, industrial supplies distributors, construction firms, and manufacturers of metal, glass, rubber, and plastic products.
    • Large companies include Baileigh Industrial, Mazak, Kennametal, and Amada.
                                Industry Forecast
                                Metalworking Machinery Manufacturers Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 20, 2023 - Factory Demand Slows
                                • Rising interest rates and the strong US dollar are putting the US manufacturing sector at risk, The Wall Street Journal reported in March. New orders for manufactured goods shrank for the sixth consecutive month in February, according to surveys by the Institute for Supply Management. Also, manufacturing output is down 1.7% from its post-pandemic peak in May 2022, according to a three-month moving average of Federal Reserve data, WSJ reports. The Fed’s aggressive interest rate hikes are raising the cost of borrowing – making machinery purchases more expensive – while the strong dollar is depressing US exports. “As the Fed continues to hike, manufacturing is going to be in the crosshairs,” Jonathan Millar, senior US economist at Barclays PLC told WSJ. “It’s hard to see this sector not suffer some sort of a downturn that is more significant than what we’ve seen already.”
                                • New orders of manufacturing technology declined in January, according to the latest US Manufacturing Technology Orders (USMTO) Report from the Association For Manufacturing Technology (AMT) released in March. New orders of manufacturing technology totaled $355.6 million for the month, down 17% from December 2022 and down nearly 20% from January of last year. Still, January orders were nearly 17% above what would be expected from a typical January, noted AMT President Douglas K. Woods, who said January orders faced a tough comparison due to the historic run of orders placed in the last two years. According to US Census Bureau data, new orders of metalworking machinery exceeded shipments by over $750 million between January 2021 and now. In contrast, the complete opposite was true in 2019, as shipments were over $1.2 billion higher than new orders, per the USMTO report.
                                • Metalworking activity – an indicator of demand for metalworking machinery – contracted again in January, but less than in recent months, Modern Machine Shop (MMS) reported in February. The Gardner Business Index (GBI) for Metalworking closed at 48.6 in January compared to 47.4 in December. (A reading below 50 signifies contraction.) Most index components held steady, but new orders and exports showed very slight slowing of contraction. Backlog contracted faster again in January, which may be the case until new orders pick up the pace and grow. Production activity paralleled backlog, contracting faster again in January, but maintaining a lower level of contraction. ‘Future business,’ a sentiment metric not included in GBI, grew faster in January and has been accelerating since December 2022. according to MMS.
                                • Smaller manufacturers needn’t miss out on the opportunities and benefits of automation as the floor space required to accommodate robots shrinks, Modern Machine Shop (MMS) reports. The growing market for affordable, space-saving robots and pre-engineered robotic work cells enables shops that are tight on floor space to optimize workflows and deliver high consistency, efficiency and quality. Today’s robots boast smaller space requirements, with compact and lightweight six-axis robots that can be mounted close to workpieces and machines in existing lines and cells. Robots deployed for machine tending can improve throughput and operational safety while maximizing overall equipment effectiveness. Smaller robots can also be deployed for secondary operations such as trimming, laser cutting, laser marking, and deburring, according to MMS. Robots can help shops overcome challenges such as evolving customer requirements, supply chain issues, and labor shortages while elevating workforce productivity and maintaining fluid operations.
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