Worldwide demand to climb 5.5% annually through 2019
Worldwide demand for machine tools is projected to climb 5.5 percent per year through 2019 to $181 billion. Gains at the global level will be largely stimulated by market growth in China and other industrializing nations, where demand for durable goods is expected to post the strongest increases as personal incomes and consumer spending rise. This will result in additional investment in new manufacturing capacity and related machine tools in the Asia/Pacific region, the Africa/Mideast region, Eastern Europe, and Central and South America. A large proportion of outdated machine tools currently in use in developing countries will be replaced between 2014 and 2019 as production levels climb. Additionally, many durable goods firms in developing countries will shift from using conventional machine tools to computer numerical controlled (CNC) models and other automated equipment, contributing to market value gains. Western Europe, Japan to see rebounding demand growth The US machine tool market is projected to see a significant slowdown following a period of double-digit annual growth between 2009 and 2014. Sales growth in Canada and Mexico will decelerate as well after registering large gains in recent years. In contrast, market conditions in numerous West European nations -- including Germany, Italy, France, and Switzerland -- are expected to improve through 2019 as both overall economic growth and gross fixed investment accelerate. In Japan, the world’s third largest national market behind China and the US, demand for machine tools is expected to rebound following several years of losses. Since many Japanese durable goods suppliers delayed making machine tool purchases in recent years, there is considerable pent up demand in the country. Durable goods manufacturing activity in Western Europe and Japan is expected to rise as well and will fuel fixed investment spending gains going forward. Consumer spending in these areas will also increase as economic conditions improve further, encouraging manufacturers to boost production and invest in new machine tools. Growing incomes, production facilities to spur market gains The machinery and transportation equipment markets are forecast to account for nearly three-fifths of all new product demand generated between 2014 and 2019. Multiple trends are expected to fuel growth in these markets. As discretionary incomes in developing regions rise, households will increase spending on a wide range of durable goods. In response, suppliers will expand existing production facilities and open new plants, leading to an increase in both industrial equipment sales and related machine tool demand. Also, many more households in developing nations will be able to afford motorcycles and automobiles as living standards improve. Better economic conditions to aid sales in developed nations Improving economic conditions in North America, Western Europe, and other developed nations will stimulate durables manufacturing activity and drive sales of machine tools for industrial applications. As new factories come on line, more machine tools will be needed. In response to stiffer competition from countries with low production costs, suppliers of new machinery in industrialized nations will develop a wide range of technologically-advanced durable goods. Also, many more households in developing nations will be able to afford motorcycles and automobiles as living standards improve. Global motor vehicle and motorcycle shipments, plus associated machine tool requirements, will rise at a healthy pace.
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