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2017 Was a Good Year for Machine Tools – What Will 2018 Be Like?

January 10, 2018

Industry analysts reported gains in consumption in 2017 and expect an even better 2018.  Last year showed signs of improvement for the machine tools industry after years of less than stellar results. According to industry reporting firm Statista, consumption of machine tools in 2017 rose 1.6% over the previous year. The previous years, specifically between 2014 and 2015, saw negative drops in the total value of the machine tool industry as a whole.

The Unpredictable Trend of Machine Tools

There are many different contributing factors that affect the success or failure of the machine tool industry. The machine tool financers significantly depend on the different sects of the manufacturing industry to make their money and when manufacturing is down, so is the machine tool industry as a whole.

In addition, factors such as near-zero interest rates and China's continued expansion into manufacturing impact the machine tools industry significantly. Modern Machine Shop detailed the rise and falls of the machine tool industry over the last few years and notes that continued offshoring of U.S. companies to markets with lower labors costs played a big part in the decline of the machine tool industry's value.

What has kept the lows less devastating, and highs better than expected in recent years is China's continuous demand for machine tools in their manufacturing sector. That being said, with the shift towards a more business-friendly economic policy in the U.S. machine tool sales are expected to increase over the next few years.

The Most Prominent Machine Tool Financiers

In EDA’s recent annual report on the machine tool finance market, they detailed the top 20 financiers within the industry in addition to the number of sales they made. According to the report, the top 20 lenders in the segment recorded 481 financial filings for machine tool sales. EDA ranked the top five lenders as:

  • CNC ASSC INC                           72
  • BANTERRA BANK                    39
  • DMG MORI SEIKI USA             32
  • ELLISON TECH                          32
  • HARTWIG INC                           30

The number one seller made big moves in November 2017 with their numbers accounting for 15% of the total sales in the same month among the top 20 lenders.

These successful lenders also sold to successful manufacturers in the U.S. The annual EDA report also ranked the top five financers of the year:

  • Kennametal                  Pennsylvania, USA                   16
  • TE Connectivity           Pennsylvania, USA                    9
  • Aerofit                          California, USA                         8
  • C&C Machine Tool      Minnesota, USA                        8
  • FMI Holdings               Texas, USA                               8

Representing different industries, strong showings from buyers and sellers alike give hope for the future of the machine tool industry in 2018 and years beyond. With the increasing available options for manufacturers to finance machine tools, expect to see the number of machine tool sales to continue to rise in 2018.

Experts agree as well as projections for the machine tool consumption show that the trend of upward consumption will continue for the next few years. Like we mentioned, the industry has gone through cycles of boom periods and slumps over the last few decades with a variety of factors impacting it. If experts' predictions end up coming to fruition, however, 2018 should be a booming year for the machine tool industry.

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