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 5,800 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.

Historically Weak Pricing Growth

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

Industry size & Structure

A typical metalworking machinery manufacturer operates out of a single location, employs 28 workers, and generates about $5-6 million annually.

    • The metalworking machinery manufacturing industry consists of about 5,800 companies which employ about 162,000 workers and generate about $32.4 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

                                May 20, 2024 - Price Climb Continues Amid Decline in Sales
                                • Producer prices for metalworking machinery manufacturers extended a steep climb that began in 2021, rising 4.3% in March compared to a year ago after rising 8.5% in the previous annual comparison, according to the latest US Bureau of Labor Statistics data. Prices continued to rise despite declining sales in the fourth quarter of last year vs the same quarter of 2022. Employment by metalworking machinery manufacturers shrank by 2% in March year over year, while average industry wages rose 5.3% over the same period to an all-time high of $27.64 per hour, BLS data show.
                                • Metalworking activity contracted at a slightly faster rate in April after an upward trend stalled in March, according to the Gardner Business Index (GBI), which tracks month-to-month changes in activity. The index closed at 47.1 in April, almost a full point lower than a year ago (48.0) and down 0.8 points relative to March’s 47.9. According to Modern Machine Shop (MMS), April’s accelerated contraction is worth monitoring because it may signal growing conservatism as high interest rates and inflation persist in the economy. New orders, production, and backlog all continued to contract in April but at slightly slower rates, with production still within striking distance of 50 (the border between expansion and contraction). Expectations regarding future business remained positive despite a slight downturn for the first time since last October.
                                • More than two-thirds of manufacturers have a positive economic outlook for 2024, but opinions are mixed about whether there will be a recession, according to the Q4 2023 Manufacturers Outlook Survey of member companies by the National Association of Manufacturers (NAM). Large manufacturers are the most optimistic, with 77.5% positive about their company’s outlook, while medium-sized manufacturers are the least optimistic with 63% feeling positive. While fewer respondents expect a recession in 2024 than they did three months ago, nearly 41% said they feel uncertain. Just over 34% of manufacturers believed the US economy would experience a recession in 2024. The top challenge for the manufacturing sector this year will be the workforce, with the labor market cooling substantially but remaining tight. Notably, NAM reported manufacturing construction spending is at a record high of $210 billion thanks to the production of semiconductors, electric vehicles and batteries, and general reshoring.
                                • Shop class is making a comeback in US high schools, Modern Machine Shop (MMS) reports. A recent MMS article links the current skilled labor shortage in metalworking and CNC machine shops to the near disappearance of shop class from middle and high schools from the 1990s through the 2010s. It largely blames the “No Child Left Behind Act” of 2002, which increased accountability by requiring all schools to help all of their students meet State-set standards. Pressure to meet federal guidelines left little time for career and technical education (CTE) programs and deprived students of the opportunity to learn technical skills and employers of a pipeline of qualified applicants. Per the Michigan Dept. of Education, 95% of high school students enrolled in a CTE program graduated in 2022 versus an overall graduation rate of 81%. Moreover, CTE graduates are out-earning graduates who didn’t focus on CTE.
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