Machine-tool industry limiting growth in the motion control market
The machine-tool industry continues to be the largest sector for the global motion control market.
The machine-tool industry continues to be the largest sector for the global motion control market. Sales of general motion control (GMC) and computer-numerical control (CNC) products to the machine-tool sector were valued at $5.4 billion in 2011, almost 45% of all motion control revenues. The machine-tool industry grew strongly in 2010 and 2011, from which the motion control market benefited with revenue growth in excess of 20% in both of those years.
The situation changed in 2012, and weak demand in the machine-tool sector is now limiting sales of motion controls. Data published by machine-tool associations on the year-on-year performance of orders in 2012 showed a grim picture of the machine-tool market for the three largest producers: China, Japan, and Germany. At IMTS in September 2012, the CMTBA announced that machine-tool orders had decreased 30% in China. Through September, the German association VDW reported a decrease of 11% for orders, and the Japanese association JMTBA reported a 5.1% decrease for orders. In November, machine-tool orders declined for a seventh straight month in Japan, dropping below 90 million yen for the first time in 25 months.
The relationship between the performance of the machine-tool industry and motion control sales cannot be fully understood without taking into account the order backlogs and buying patterns of the machine builders (OEMs). Machine-tool associations also track machine-tool production, which has continued to grow in 2012 because of a large backlog of orders. Current backlogs exceed 8 months in Germany and 5 months in Japan. Since machine-tool builders are still increasing their production output, motion control sales to the machine-tool sector are forecast to have grown in 2012. However, with only 1.8% growth in EMEA and 1.4% in Japan, growth is constrained by a change in the buying patterns; OEMs have already reduced or postponed orders of motion control products in anticipation of the effect of falling 2012 orders for machine tools and thus a decline of production. Order backlogs continue to shrink, so machine-tool production in 2013 will feel the full impact of the lower 2012 order level. Sales of motion control products to the machine-tool sector are forecast to suffer even more in 2013, a decline of 0.2% being projected in the Japanese market and increase of only 0.2% projected in the EMEA market.
Unlike the motion-control markets in Japan and EMEA, the Asian motion-control market was hit severely in 2012. With a much shorter order backlog, declines in machine-tool shipments were reported in 2012 in China, the world’s largest producer and consumer of machine tools; sales of motion products to the machine-tool sector in Asia are projected to have declined over 17% in 2012. Both the machine-tool and the motion-control markets are expected to rebound in 2013, in part because of efforts from the Chinese Government, which aims to increase China’s machine-tool production significantly as part of the 12th Five-year Plan. Sales of motion control products to the machine-tool sector in Asia are forecast to grow by 7.4% in 2013.
On the other hand, the Americas region is currently a bright spot for the motion control market. Machine-tool orders continued to grow in the US in 2012, and sales of motion-control products to the machine-tool sector are projected to have grown by 4.8% in 2012 and to grow by 3.5% in 2013. However, the machine-tool market in the Americas is much smaller than that of Europe, Asia or Japan. With the American market accounting for only 10% of the global sales of motion control products to the machine-tool sector in 2011, the positive effect from the American machine-tool industry is small compared to the negative effects from the industry in the other regions.
With the machine-tool industry currently failing to boost growth in the motion-control market like it did so well in 2010 and 2011, global motion-control sales will see only limited growth in 2012 and 2013. This is particularly true for CNC products, which are used primarily in machine-tool applications. In 2012, global sales of motion controls to the total industrial market are projected to have contracted by 1.9%. The outlook is better in 2013, when the Asian market is expected to recover; but revenue growth is forecast to remain less than 5% due the struggles in the markets in Japan and EMEA.
Do you have experience and expertise with the topics mentioned in this content? You should consider contributing to our CFE Media editorial team and getting the recognition you and your company deserve. Click here to start this process.